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LO P5.14 Consolidation Working Paper One Year After Acquisition On January 1, 2019, Pine Mountain Resorts acquires a 60 percent interest in Shawnee Peak Enterprises

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LO P5.14 Consolidation Working Paper One Year After Acquisition On January 1, 2019, Pine Mountain Resorts acquires a 60 percent interest in Shawnee Peak Enterprises for $25.4 million in cash. The date-of- acquisition fair value of the noncontrolling interest in Shawnee is estimated at $11.6 million. Shawnee's book value at the date of acquisition is $2 million. Its reported assets and liabilities are carried at amounts approximating fair value, except property and equipment, with a remaining life of 10 years, straight-line, is overvalued by $5 million. Previously unrecorded licenses and certificates, with a remaining life of four years, straight-line, are valued at $8 million. Goodwill from this acquisition is impaired by $150,000 in 2019. The December 31, 2019, trial balances of Pine Mountain and Shawnee are below. Pine Mountain uses the complete equity method to report the investment on its own books. Pine Mountain Resorts Dr (Cr) Shawnee Peak Enterprises Dr (Cr) (in thousands) $ 1,000 12,000 800 Current assets Property and equipment, net. AFS investments Investment in Shawnee Liabilities. . Capital stock Retained earnings, January 1. Accumulated other comprehensive income, January 1 Revenues Equity in net income of Shawnee. Equity in other comprehensive income of Shawnee Operating expenses... Unrealized gains on AFS investments (OCI). Total $ 5,000 70,000 2,000 25,538 (82,577) (100) (13,700) (15) (28,000) (135) (3) 22,000 (8) (9,895) (9) (1,985) (6) (4,000) 2,100 (5) $ 0 $ 0 For all answers, show amounts in thousands and use U.S. GAAP. a. Required Calculate the total goodwill for this acquisition and its allocation to the controlling and noncontrol- ling interest. b. Calculate 2019 equity in net income of Shawnee, appearing on Pine Mountain's books, and 2019 non- controlling interest in net income of Shawnee, appearing on the 2019 consolidated income statement. c. Prepare a working paper to consolidate the trial balances of Pine Mountain and Shawnee at Decem- ber 31, 2019. d. Prepare a consolidated statement of income and comprehensive income for 2019, and a consolidated balance sheet at December 31, 2019, in good form. LO P5.14 Consolidation Working Paper One Year After Acquisition On January 1, 2019, Pine Mountain Resorts acquires a 60 percent interest in Shawnee Peak Enterprises for $25.4 million in cash. The date-of- acquisition fair value of the noncontrolling interest in Shawnee is estimated at $11.6 million. Shawnee's book value at the date of acquisition is $2 million. Its reported assets and liabilities are carried at amounts approximating fair value, except property and equipment, with a remaining life of 10 years, straight-line, is overvalued by $5 million. Previously unrecorded licenses and certificates, with a remaining life of four years, straight-line, are valued at $8 million. Goodwill from this acquisition is impaired by $150,000 in 2019. The December 31, 2019, trial balances of Pine Mountain and Shawnee are below. Pine Mountain uses the complete equity method to report the investment on its own books. Pine Mountain Resorts Dr (Cr) Shawnee Peak Enterprises Dr (Cr) (in thousands) $ 1,000 12,000 800 Current assets Property and equipment, net. AFS investments Investment in Shawnee Liabilities. . Capital stock Retained earnings, January 1. Accumulated other comprehensive income, January 1 Revenues Equity in net income of Shawnee. Equity in other comprehensive income of Shawnee Operating expenses... Unrealized gains on AFS investments (OCI). Total $ 5,000 70,000 2,000 25,538 (82,577) (100) (13,700) (15) (28,000) (135) (3) 22,000 (8) (9,895) (9) (1,985) (6) (4,000) 2,100 (5) $ 0 $ 0 For all answers, show amounts in thousands and use U.S. GAAP. a. Required Calculate the total goodwill for this acquisition and its allocation to the controlling and noncontrol- ling interest. b. Calculate 2019 equity in net income of Shawnee, appearing on Pine Mountain's books, and 2019 non- controlling interest in net income of Shawnee, appearing on the 2019 consolidated income statement. c. Prepare a working paper to consolidate the trial balances of Pine Mountain and Shawnee at Decem- ber 31, 2019. d. Prepare a consolidated statement of income and comprehensive income for 2019, and a consolidated balance sheet at December 31, 2019, in good form

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