On January 1 , 2 0 2 3 , Mona, Incorporated, acquired 8 0 percent of Lisa Company's common stock as well as 6 0 percent of its preferred shares Mona paid $ 6 5 , 0 0 0 in cash for the preferred stock, with a call value of 1 1 0 percent of the $ 5 0 per share par value The remaining 4 0 percent of the preferred shares traded at a $ 3 4 , 0 0 0 fair value Mona paid $ 5 5 2 , 8 0 0 for the common stock At the acquisition date, the noncontrolling interest in the common stock had a fair value of $ 1 3 8 , 2 0 0 The excess fair value over Lisa's book value was attributed to franchise contracts of $ 4 0 , 0 0 0 This intangible asset is being amortized over a 4 0 year period Lisa pays all preferred stock dividends ( a total of $ 8 , 0 0 0 per year ) on an annual basis During 2 0 2 3 , Lisa's book value increased by $ 5 0 , 0 0 0 On January 2 , 2 0 2 3 , Mona acquired one half of Lisa's outstanding bonds payable to reduce the business combination's debt position Lisa's bonds had a face value of $ 1 0 0 , 0 0 0 and paid cash interest of 1 0 percent per year These bonds had been issued to the public to yield 1 4 percent Interest is paid each December 3 1 On January 2 , 2 0 2 3 , these bonds had a total $ 8 8 , 3 5 0 carrying amount Mona paid $ 5 3 , 3 1 0 , indicating an effective interest rate of 8 percent On January 3 , 2 0 2 3 , Mona sold Lisa fixed assets that had originally cost $ 1 0 0 , 0 0 0 but had accumulated depreciation of $ 6 0 , 0 0 0 when transferred The transfer was made at a price of $ 1 2 0 , 0 0 0 These assets were estimated to have a remaining useful life of 1 0 years The individual financial statements for these two companies for the year ending December 3 1 , 2 0 2 4 , are as follows Accounts Mona, Incorporated Lisa Company Required a What consolidation worksheet adjustments would have been required as of January 1 , 2 0 2 3 , to eliminate the subsidiary's common and preferred stocks b What consolidation worksheet adjustments would have been required as of December 3 1 , 2 0 2 3 , to account for Mona's purchase of Lisa's bonds c What consolidation worksheet adjustments would have been required as of December 3 1 , 2 0 2 3 , to account for the intra entity sale of fixed assets d Assume that consolidated financial statements are being prepared for the year ending December 3 1 , 2 0 2 4 Calculate the consolidated balance for each of the following accounts Franchises Fixed Assets Accumulated Depreciation Expenses The individual financial statements for these two companies for the year ending December Note Credits are indicated by parentheses

Question

On January 1 , 2 0 2 3 , Mona, Incorporated, acquired 8 0 percent of Lisa Company's common stock as well as 6 0 percent of its preferred shares  Mona paid $ 6 5 , 0 0 0 in cash for the preferred stock, with a call value of 1 1 0 percent of the $ 5 0 per share par value  The remaining 4 0 percent of the preferred shares traded at a $ 3 4 , 0 0 0 fair value  Mona paid $ 5 5 2 , 8 0 0 for the common stock  At the acquisition date, the noncontrolling interest in the common stock had a fair value of $ 1 3 8 , 2 0 0   The excess fair value over Lisa's book value was attributed to franchise contracts of $ 4 0 , 0 0 0   This intangible asset is being amortized over a 4 0   year period  Lisa pays all preferred stock dividends ( a total of $ 8 , 0 0 0 per year ) on an annual basis  During 2 0 2 3 , Lisa's book value increased by $ 5 0 , 0 0 0   On January 2 , 2 0 2 3 , Mona acquired one   half of Lisa's outstanding bonds payable to reduce the business combination's debt position  Lisa's bonds had a face value of $ 1 0 0 , 0 0 0 and paid cash interest of 1 0 percent per year  These bonds had been issued to the public to yield 1 4 percent  Interest is paid each December 3 1   On January 2 , 2 0 2 3 , these bonds had a total $ 8 8 , 3 5 0 carrying amount  Mona paid $ 5 3 , 3 1 0 , indicating an effective interest rate of 8 percent  On January 3 , 2 0 2 3 , Mona sold Lisa fixed assets that had originally cost $ 1 0 0 , 0 0 0 but had accumulated depreciation of $ 6 0 , 0 0 0 when transferred  The transfer was made at a price of $ 1 2 0 , 0 0 0   These assets were estimated to have a remaining useful life of 1 0 years  The individual financial statements for these two companies for the year ending December 3 1 , 2 0 2 4 , are as follows  Accounts Mona, Incorporated Lisa Company Required  a   What consolidation worksheet adjustments would have been required as of January 1 , 2 0 2 3 , to eliminate the subsidiary's common and preferred stocks  b   What consolidation worksheet adjustments would have been required as of December 3 1 , 2 0 2 3 , to account for Mona's purchase of Lisa's bonds  c   What consolidation worksheet adjustments would have been required as of December 3 1 , 2 0 2 3 , to account for the intra   entity sale of fixed assets  d   Assume that consolidated financial statements are being prepared for the year ending December 3 1 , 2 0 2 4   Calculate the consolidated balance for each of the following accounts  Franchises Fixed Assets Accumulated Depreciation Expenses The individual financial statements for these two companies for the year ending December Note  Credits are indicated by parentheses

Accepted Answer

The Answer is in the image, click to view ...

Question

On January 1 , 2 0 2 3 , Mona, Incorporated, acquired 8 0 percent of Lisa Company's common stock as well as 6 0

Step by Step Solution

Step: 1

Get Instant Access with AI-Powered Solutions

Step: 2

Step: 3

Ace Your Homework with AI

Students also viewed these Accounting questions

Question

Question

Question

Question

Question

Question

Question

Question

Question