Question
On 1/1/2020, Company AAA purchased 80% of the shares of Company BBB for $ 5,000. On that date, Company BBB had shareholders' equity of capital
On 1/1/2020, Company AAA purchased 80% of the shares of Company BBB for $ 5,000. On that date, Company BBB had shareholders' equity of capital $ 3,000, additional paid-in capital $ 1,000, and retained earnings $ 1,000.
On 1/1/2020, Company BBB had overvalued inventory of $ 500 (all sold in 2020), undervalued land by $ 1,000, and undervalued equipment by $ 700 (7 years expected useful life).
The following are the statements of financial position for both companies at 31/12/2020.
In 2020, BBB declared dividends of $ 100 and had net income $ 1,000
31/12/2020 | AAA | BBB | Dr. | Cr. | Consolidation |
Cash | 1,000 | 500 |
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Accounts receivable | 2,000 | 1,500 |
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Dividends receivable | 80 | - |
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Inventory | 500 | 1,000 |
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Equipment | 5,000 | 2,000 |
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Buildings | 10,000 | 1,000 |
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Land | 20,000 | 2,000 |
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Investment in BBB | 6,040 | - |
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Goodwill | - | - |
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TOTAL | 44,620 | 8000 |
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Accounts payable | 3,320 | 2,000 |
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Dividends payable | - | 100 |
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Capital stock | 25,000 | 3,000 |
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Additional paid-in capital | 10,000 | 1,000 |
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Retained earnings | 6,300 | 1,900 |
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Noncontrolling interest |
| - |
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TOTAL | 44,620 | 8,000 |
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Required
As at 31/12/2020, compute the consolidated amount for the following , showing your detailed computations
1- The consolidated amount for cash
2- The consolidated amount for inventory
3- The consolidated amount for equipment
4- The consolidated amount for land
5- The consolidated amount for goodwill
6- The consolidated amount for accounts payable
7- The consolidated amount for dividends payable
8- The consolidated amount for additional paid in capital
9- The consolidated amount for noncontrolling interest
10- The total assets amount for the consolidated financial statements
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