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I need help with this a and b and c please this is all the information that is given Consolidation subsequent to date of acquisition
I need help with this a and b and c please
this is all the information that is given
Consolidation subsequent to date of acquisition - Equity method with noncontrolling interest and AAP Assume that, on January 1, 2009, a parent company acquired an 80% interest in its subsidiary. The total fair value of the controlling and noncontrolling interests was $500,000 over the book value of the subsidiary's Stockholders' Equity on the acquisition date. The parent assigned the excess to the following (A) assets: [A] Asset Initial Fair Value Useful Life (years) Initial Useful [A] Asset Fair Value Life (years) Property, plant and equipment (PPE), net $105,000 Customer list 145,000 250,000 Indefinite $500,000 10 10 Goodwill 80% of the Goodwill is allocated to the parent. The parent and the subsidiary report the following financial statements at December 31, 2013: Parent Subsidiary Income statement: Sales Cost of goods sold Gross profit Income (loss) from subsidiary Operating expenses Parent Subsidiary Balance sheet: $7,330,000 $1,872,000 Assets (5,131,000) (1,122,300) Cash 2,199,000 749,700 Accounts receivable $412,513 938,240 $133,011 433,956 557,409 190,696 (1.392,700) 1,422,020 1,476,871 Inventory (486,330) Equity investment Property, plant and equipment (PPE). 263,370 net Net income $996,996 5,374,356 1,280,669 $9,624,000 $2,405,045 Statement of retained earnings: BOY retained earnings $3,682,592 $966,425 Liabilities and stockholders' equity Net income 996,996 263,370 Current liabilities Dividends (199,159) (39,281) Long-term liabilities EOY retained earnings $4,480,429 $1,190,514 Common stock APIC Retained earnings $1,053,321 $433,956 2,000,000 500,000 1.198,455 124,700 891,795 155,875 4,480,429 1.190,514 $9,624,000 $2,405,045 a. Disaggregate and document the activity for the 100% Acquisition Accounting Premium (AAP), the controlling interest AAP and the noncontrolling interest AAP. a. Disaggregate and document the activity for the 100% Acquisition Accounting Premium (AAP), the controlling interest AAP and the noncontrolling interest AAP. Note: Do not use negative signs with any of your answers below. Unamortized Unamortized Unamortized 2010 1/1/2009 Amortization 1/1/2010 Amortization 1/1/2011 Property, plant and equipment (PPE), net Customer list 0 Goodwill 2009 AAP 0 0 0 0 0 0 OOOO 0 o Olo 0 0 0 0 0 0 0 0 0 Parent: Property, plant and equipment (PPE), net Customer list Goodwill 0 0 0 0 0 OOOO 0 0 0 0 0 0 0 0 Subsidiary: Property, plant and equipment (PPE), net Customer list Goodwill OOO OO 0 OOolo 0 0 0 0 0 0 b. Calculate and organize the profits and losses on intercompany transactions and balances. Downstream Upstream Jan 1, 2013 Dec 31, 2013 0 0 0 0 c. Compute the pre-consolidation Equity Investment account beginning and ending balances starting with the stockholders' equity of the subsidiary. Round answers to the nearest whole number. Equity investment at 1/1/13: Common stock APIC Retained earnings 0 0 0 0 0 Equity investment at 12/31/13: Common stock APIC Retained earnings Step by Step Solution
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