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On January 1, 2022, Allan Company acquired 80 percent of Bond Company. Of Bond's total business fair value, $143,000 was allocated to copyrights with a
On January 1, 2022, Allan Company acquired 80 percent of Bond Company. Of Bond's total business fair value, $143,000 was allocated to copyrights with a 20-year remaining life. Subsequently, on January 1, 2023, Bond obtained 70 percent of Cole Company's outstanding voting shares. In this second acquisition, $130,800 of Cole's total business fair value was assigned to copyrights that had a remaining life of 12 years. Bond's book value was $667,500 on January 1, 2022, and Cole reported a book value of $141,000 on January 1, 2023. Bond has made numerous inventory transfers to Allan since the business combination was formed. Intra-entity gross profits of $33,000 were present in Allan's inventory as of January 1, 2024. During the year, $236,000 in additional intra-entity sales were made with $25,960 in Intra-entity gross profits in inventory remaining at the end of the period. Both Allan and Bond utilized the equity method to account for their investment balances. Following are the individual financial statements for the companies for 2024 with consolidated totals Note: Parentheses indicate a credit balance. Required: Develop the worksheet entries necessary to derive these reported balances: Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Prepare Entry G to recognize the intra-entity gross profit in inventory in 2023. Prepare entry S1 to eliminate stockholders' equity accounts of Cole. Prepare entry S2 to eliminate stockholders' equity accounts of Bond. Prepare entry A to recognize allocations attributed to specific accounts at acquisition date for 2024. Prepare Entry I1 to eliminate the intra-entity income accrual found on Allan's records. 6 Prepare Entry I2 to eliminate the intra-entity income accrual found on Bond's records. 7 Prepare Entry D1 to eliminate the intra entity dividends for Bond. 8 Prepare Entry D2 to eliminate the intra entity dividends for Cole. 9 Prepare Entry E to recognize the current year amortization. 10 Prepare Entry TI to eliminate the intra-entity inventory transfer. 11 Prepare Entry G to defer the ending intra-entity gross profit on the intra-entity transfers
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