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Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2018, for $736,480 cash. At the acquisition date, Sierras

Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2018, for $736,480 cash. At the acquisition date, Sierras total fair value, including the noncontrolling interest, was assessed at $920,600 although Sierras book value was only $606,000. Also, several individual items on Sierras financial records had fair values that differed from their book values as follows:

Book Value Fair Value
Land $ 67,000 $ 294,000
Buildings and equipment (10-year remaining life) 366,000 324,000
Copyright (20-year remaining life) 190,000 310,000
Notes payable (due in 8 years) (181,000 ) (171,400 )

For internal reporting purposes, Padre, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2018, for both companies.

Padre Sierra
Revenues $ (1,544,300 ) $ (620,500 )
Cost of goods sold 796,000 449,000
Depreciation expense 276,000 17,500
Amortization expense 0 9,500
Interest expense 47,500 7,500
Equity in income of Sierra (107,200 ) 0
Net income $ (532,000 ) $ (137,000 )
Retained earnings, 1/1/18 $ (1,482,500 ) $ (446,000 )
Net income (532,000 ) (137,000 )
Dividends declared 260,000 65,000
Retained earnings, 12/31/18 $ (1,754,500 ) $ (518,000 )
Current assets $ 1,137,820 $ 493,000
Investment in Sierra 791,680 0
Land 361,000 67,000
Buildings and equipment (net) 941,000 348,500
Copyright 0 180,500
Total assets $ 3,231,500 $ 1,089,000
Accounts payable $ (232,000 ) $ (230,000 )
Notes payable (495,000 ) (181,000 )
Common stock (300,000 ) (100,000 )
Additional paid-in capital (450,000 ) (60,000 )
Retained earnings (above) (1,754,500 ) (518,000 )
Total liabilities and equities $ (3,231,500 ) $ (1,089,000 )

At year-end, there were no intra-entity receivables or payables.

Using the acquisition method, prepare the worksheet to consolidate these two companies.

image text in transcribedPlease fix the wrong number, thanks

Answer is not complete PADRE INC., AND SIERRA CORPORATION Consolidated Worksheet For Year Ending December 31, 2018 Consolidation Entries Noncontrolli ing Consolidated Padre Debit Credit (820,500) 449,000 17,500 9,500 7,500 (2,164,800) 1,544,300 796,000 276,000 Cost of goods sold Depreciation expense Amortization expense Interest ex 1.245,000 289,300 15,500 56.200 4,200 47,500 (107,200) (532,000) 6,000 1,200 107,200 Separate company net income (137,000) Consolidated net income (558,800) 26,800 (532,000) (1.482,500) (26,800) NI to Padre Company 446,000) (137,000) 65,000 (518,000) 493,000 Retained earnings 1/1 446,000 (1.482,500) (532,000) 260,000 (532,000) 52,000 260,000 (1,754,500) 1,630,820 Dividends declared 13,000 Retained earnings 12131 Current assets Investment in Sierra (1,754,500) 1,137,820 791,680 361,000 941,000 52,000 227,000 4,200 120,000 67,000 348,500 180,500 1,089,000 (230,000) (181,000) 655,000 1.251,700 294,500 3,832,020 42,000 6,000 Buildings and equipment (net) Copyright Total assets Accounts payab Notes paya 3,231,500 (232,000) 495,000) (482,000) (687,600) 9,600 1,200 in Sierra 111 200,680 (200,680) 214.480 300,000) NCI in Sierra 1231 (214,480) (300,000) 450,000) (1,754,500) (100,000) (60,000) 618,000) 100,000 60,000 (450,000) Additional paid-in capital Retained earnings 12/31 (above) Total liabilities and stockholders equity (1 ,754,500) 306,080 (3,419,620) (3,231,500) 1,089,000) 1,133,200

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