Question
NEED E, F, G AND H Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid $952,000 in cash
NEED E, F, G AND H
Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid $952,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $238,000 both before and after Millers acquisition.
On January 1, 2019, Taylor reported a book value of $546,000 (Common Stock = $273,000; Additional Paid-In Capital = $81,900; Retained Earnings = $191,100). Several of Taylors buildings that had a remaining life of 20 years were undervalued by a total of $72,800.
During the next three years, Taylor reports income and declares dividends as follows:
Year | Net Income | Dividends | ||||
2019 | $ | 63,900 | $ | 9,200 | ||
2020 | 82,800 | 13,800 | ||||
2021 | 92,000 | 18,400 | ||||
Determine the appropriate answers for each of the following questions:
e. On the parent companys separate financial records, what would be the December 31, 2021, balance for the Investment in Taylor Company account under each of the following accounting methods?
|
f. As of December 31, 2020, Millers Buildings account on its separate records has a balance of $736,000 and Taylor has a similar account with a $276,000 balance. What is the consolidated balance for the Buildings account?
g. What is the balance of consolidated goodwill as of December 31, 2021?
|
Assume that the parent company has been applying the equity method to this investment. On December 31, 2021, the separate financial statements for the two companies present the following information:
Miller Company | Taylor Company | |||||
Common stock | $ | 460,000 | $ | 273,000 | ||
Additional paid-in capital | 257,600 | 81,900 | ||||
Retained earnings, 12/31/21 | 570,400 | 388,400 |
What will be the consolidated balance of each of these accounts?
Show less
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started