Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On December 31, Year 3, Mueller Corp. acquired 80% of the outstanding shares of Wilson Inc. for a total cost of $244,000. The carrying

On December 31, Year 3, Mueller Corp. acquired 80% of the outstanding shares of Wilson Inc. for a total cost of $244,000. The carrying amount of Wilson's assets, liabilities, and equity was equal to fair value except for the following: Inventory Equipment, net Patent Long-term debt Common shares Retained earnings Carrying Amount Fair Value $ 60, 400 $ 274,000 184,000 179,000 42,800 68, 800 280,000 40, 800 160,800 ? ? As at December 31, Year 3, the equipment and patent had an estimated useful life of six and eight years, respectively. The long-term debt is due on January 1, Year 9. There was a goodwill impairment loss of $3,000 in Year 5. There were no other impairment losses. Mueller uses the cost method to account for its investment in Wilson. The book values of selected accounts for the year ended December 31, Year 7 were as follows: Dividend income Net income Common shares Retained earnings Mueller Wilson 12, 400 62, 800 $ 102,000 26, 800 179,000 258,000 118,000 Required: (a) Prepare a schedule of changes to the acquisition differential for the four year period ending December 31, Year 7. (Leave no cells blank - be certain to enter "O" wherever required. Omit $ sign in your response. Negative/Deductible amounts should be indicated by a minus sign.) Inventory Equipment (6 years) Patents (8 years) Long-term debt (5 years) Goodwill Balance Dec. 1 Year 3 $ Balance Changes Dec. 31 Year 4, 5&6 Year 7 Year 7 (b) Calculate consolidated net income attributable to the parent, ending retained earnings and non-controlling interest at December 31, Year 7. (Omit $ sign in your response.) Consolidated net income attributable to the parent Consolidated retained earnings Non-controlling interest

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Modern Advanced Accounting In Canada

Authors: Hilton Murray, Herauf Darrell

7th Edition

1259066487, 978-1259066481

More Books

Students also viewed these Accounting questions