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P 4-5 Excess Identifiable to Net Assets Nick NV acquired 90 percent of Kim NV's interest on January 1, 2014, by paying $9,000,000 in cash
P 4-5 Excess Identifiable to Net Assets Nick NV acquired 90 percent of Kim NV's interest on January 1, 2014, by paying $9,000,000 in cash At that time, Kim NV's net assets were $9.000,000. It was also identified that some of Kim NV's net assets book values were different from the fair values. The inventory was overvalued by $100,000, and the building-having 6 years of useful life remaining-was undervalued by $600,000. The separale financial statements of Nick NV and Kim NV on December 31, 2014 are as follows (in thousands): Nick NV Kim NV Combined Income and Retained Earnings Statements for the Year Ended December 31 Sales Income from Kim NV Cost of sales Depreciation expenses Other expenses $9,800 $4,700 $ 450 (S 6.100) ($3,000) (S 1,000) (S 500) (S 150) (S 700) $ 3,000 500 $11,200 $4,000 (S 600) (S 100) 513.600 $4.400 Net income Add: Beginning retained January 1 Deduct: Dividends Retained earmings December 31 Nick NV Balance Sheet at December 31 Cash Accounts receivable-net Inventories Other current assets Kim NV S 1800 100 S 1400 6o Buildings-net Equipment-net Investment in Kim NV $ 1000 5 90 S 3.300 2,800 S 4,000 $ 3400 S 2,100 $1900 $ 9,360 $24.960 $11,300 Total Assets Accounts payable Other liabilities Capital Stock, $10 par Retained earnings $ 4,100 $ 3,860 $ 3,400 $ 1,300 S 600 $ 5,000 $13,600 4,400 $24,960 $11.300 Total liabilities and equities Kim NV's accounts payable include $200,000 to Nick NV REQUIRED: Prepare consolidation workpapers for Kim NV and subsidiary for the year ended December 31, 2014
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