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Posted on Jul 15, 2024

Just Requirements. 1-2 ONLY Project Scenario Pecos Company acquired 100 percent of Saro's outstanding stock for $1.450.000 cmh on January 1, 2020, when Suaro had

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Project Scenario Pecos Company acquired 100 percent of Saro's outstanding stock for $1.450.000 cmh on January 1, 2020, when Suaro had the following balance sheet: Assets Littles and Equity $(422.000) (350,000 Cash Receivables Inventory Land Equipment (net) Software Total assets $ 37,000 Liabilities 82.000 149.000 Common stock 90,000 Retained earnings 225.000 315.000 $$98.000 Total liabilities and equity 1591.000) Al the acquisition date, the fair values of each identifiable asset and liability that differed from book valse were as follows: Land Brand name Software In process RAD $ 50.000 60,000 indefinite life-unicognized on Saro's books) 415,000 (year estimated remaining useful life) 300,000 Additional Information . Although at acquisition date locos expected future benefits from Saro's in process research and development (RAD), by the end of 2020 it became clear that the research project was bailure with no future cconomic benefits . During 2020, Surro carns $75.000 and pays no dividendi. . Selected amounts from Pocos's and Suare's separate financial statements at December 31, 2021. are presented in the consolidated information worksheet. All consolidated worksheets are to be prepared as of December 31, 2021, two years subsequent to acquisition Pecos January 1, 2021, Retained Earnings balance before any effect from Sato's 2020 income-is 51930.000) credit balance Pecos has 500,000 common shares outstanding for EPS calculations and reported $2.943100 for consolidated assets at the beginning of the period. The following is the consolidated information worksheet her 134 D 11 1 December 31, 2021, trial halanes 2 3 Nos SLO 000) 51100011 4 Revenues a 8 O i A B Pecos S[ 1.052,000) 821.000 2 ? 2 Suaro $(427.000) 262.000 SC165.000) 1 December 31, 2021, trial balances 2 3 4 Revenues S Operating expenses 6 Goodwill impairment loss 7 Income or Suar S Net income 9 10 Retained camnings-Pecos 1/1/21 11 Retained earnings-Suaro 1/1/21 12 Net income (above) 13 Dividersds declared 1 Retained earnings 12/31/21 15 16 Cash 17 Receivables 18 Inventory 19 Investment in Suaro 20 2 2 200.000 2 (201.000) 165.000) 35.000 S331.000) 195,000 247,000 415.000 ? 95,000 143.000 197.000 21 341.000 240,100 85,000 100,000 312.000 145,000 22 23 Land 24 Equipment (net) 25 Software 26 Other intangibles 27 Goodwill 28 Total assets 29 30 Liabilities 31 Common stock 32 Retained caring above) UJ Total liabilities and equity 34 2 S 932.000 (1.537.100) (500,000) (251,000) (350,000) (331,000) S(932.000) 2 (1.537.100) (500,000) ? 2 (250,000) (350,000) (331.000) $1932.000) 30 Liabilities 31 Common stock 32. Retained earnings (above) 33 Total liabilities and equity 14 35 Fair value allocation schedule 36 Price paid 37 Rook valus 33 Excess initial value 39 to land to brand name 41 to software 42 to IPRAD 43 to goodwill 44 -45 Suro's RE changes 46 2020 2021 Amortizations 2020 2021 1.450.000 176,000 914,000 (10,000) 60.000 100,000 300,000 $24,000 2 2 2 2 7 2 Dividends 0 Income 75,000 165.000 35.000 Project Requirements Complete the four worksheets as follows: 1. Input the consolidated information worksheet provided and complete the fair value allocation schedule by computing the excess amortizations for 2020 and 2021 2. Using separate worksheets, prepare Pecos's trial balances for each of the indicated accounting methods (equity, initial value and partial equity). Use only formulas for the intent is Suare, the Income of Stato, and Retained Earnings accounts. 2. Using references to other cells only (either from the consolidated information worksheet or from the separate method sheetsprepare for each of the three consolidation worksheets Adjustments and eliminations Consolidated balances 4. Calculate and present the effects of a 2021 total goodwill impairment loss on the following ratios for the consolidated entity: Earnings per stare (EPS). . Return on assets Rehunt on equity Debt to equity Your worksheets should have the capability to adjust immediately for the possibility that all acquisition will can be considered impaired in 2021 5. Prepare a report that describes and discusses the following worksheet results: 1. The effects of alternative instante contraindian B 2 299. . Project Scenario Pecos Company acquired 100 percent of Saro's outstanding stock for $1.450.000 cmh on January 1, 2020, when Suaro had the following balance sheet: Assets Littles and Equity $(422.000) (350,000 Cash Receivables Inventory Land Equipment (net) Software Total assets $ 37,000 Liabilities 82.000 149.000 Common stock 90,000 Retained earnings 225.000 315.000 $$98.000 Total liabilities and equity 1591.000) Al the acquisition date, the fair values of each identifiable asset and liability that differed from book valse were as follows: Land Brand name Software In process RAD $ 50.000 60,000 indefinite life-unicognized on Saro's books) 415,000 (year estimated remaining useful life) 300,000 Additional Information . Although at acquisition date locos expected future benefits from Saro's in process research and development (RAD), by the end of 2020 it became clear that the research project was bailure with no future cconomic benefits . During 2020, Surro carns $75.000 and pays no dividendi. . Selected amounts from Pocos's and Suare's separate financial statements at December 31, 2021. are presented in the consolidated information worksheet. All consolidated worksheets are to be prepared as of December 31, 2021, two years subsequent to acquisition Pecos January 1, 2021, Retained Earnings balance before any effect from Sato's 2020 income-is 51930.000) credit balance Pecos has 500,000 common shares outstanding for EPS calculations and reported $2.943100 for consolidated assets at the beginning of the period. The following is the consolidated information worksheet her 134 D 11 1 December 31, 2021, trial halanes 2 3 Nos SLO 000) 51100011 4 Revenues a 8 O i A B Pecos S[ 1.052,000) 821.000 2 ? 2 Suaro $(427.000) 262.000 SC165.000) 1 December 31, 2021, trial balances 2 3 4 Revenues S Operating expenses 6 Goodwill impairment loss 7 Income or Suar S Net income 9 10 Retained camnings-Pecos 1/1/21 11 Retained earnings-Suaro 1/1/21 12 Net income (above) 13 Dividersds declared 1 Retained earnings 12/31/21 15 16 Cash 17 Receivables 18 Inventory 19 Investment in Suaro 20 2 2 200.000 2 (201.000) 165.000) 35.000 S331.000) 195,000 247,000 415.000 ? 95,000 143.000 197.000 21 341.000 240,100 85,000 100,000 312.000 145,000 22 23 Land 24 Equipment (net) 25 Software 26 Other intangibles 27 Goodwill 28 Total assets 29 30 Liabilities 31 Common stock 32 Retained caring above) UJ Total liabilities and equity 34 2 S 932.000 (1.537.100) (500,000) (251,000) (350,000) (331,000) S(932.000) 2 (1.537.100) (500,000) ? 2 (250,000) (350,000) (331.000) $1932.000) 30 Liabilities 31 Common stock 32. Retained earnings (above) 33 Total liabilities and equity 14 35 Fair value allocation schedule 36 Price paid 37 Rook valus 33 Excess initial value 39 to land to brand name 41 to software 42 to IPRAD 43 to goodwill 44 -45 Suro's RE changes 46 2020 2021 Amortizations 2020 2021 1.450.000 176,000 914,000 (10,000) 60.000 100,000 300,000 $24,000 2 2 2 2 7 2 Dividends 0 Income 75,000 165.000 35.000 Project Requirements Complete the four worksheets as follows: 1. Input the consolidated information worksheet provided and complete the fair value allocation schedule by computing the excess amortizations for 2020 and 2021 2. Using separate worksheets, prepare Pecos's trial balances for each of the indicated accounting methods (equity, initial value and partial equity). Use only formulas for the intent is Suare, the Income of Stato, and Retained Earnings accounts. 2. Using references to other cells only (either from the consolidated information worksheet or from the separate method sheetsprepare for each of the three consolidation worksheets Adjustments and eliminations Consolidated balances 4. Calculate and present the effects of a 2021 total goodwill impairment loss on the following ratios for the consolidated entity: Earnings per stare (EPS). . Return on assets Rehunt on equity Debt to equity Your worksheets should have the capability to adjust immediately for the possibility that all acquisition will can be considered impaired in 2021 5. Prepare a report that describes and discusses the following worksheet results: 1. The effects of alternative instante contraindian B 2 299.