Page 193 FIGURE 5-2 January 1, 20x1, Worksheet for Consolidated Balance Sheet, Date of Combination; 80 Percent Acquisition at More than Book Value Consolidation Entries Peerless Products Special Foods DR CR Consolidated Balance Sheet Cash $ $ 50,000 $ 90,000 125.000 50.000 Accounts Receivable Inventory Investment in Special Foods 40,000 75.000 100,000 310,000 60,000 5,000 165,000 0 240,000 70,000 Land 175.000 10,000 60,000 40.000 600.000 (300.000) Buildings & Equipment Less: Accumulated Depreciation Goodwill 300,000 800,000 (400,000) 300,000 225.000 1.160,000 (400,000) 12,500 $1,377,500 12,500 Total Assets $1,100,000 $500,000 $387,500 $610,000 100.000 100.000 Accounts Payable Bonds Payable Common Stock Retained Earnings NCI in NA of Special Foods 100,000 200,000 500.000 300.000 200,000 100.000 200,000 100,000 200.000 300.000 500,000 300,000 77.500 60,000 17,500 $ 77,500 Total Liabilities & Equity $1,100,000 $500,000 $300,000 $1,377,500 Two spreadsheet assignments must be done in teams of 2 students unless special permission is obtained from the instructor. Students must use Excel and formulas must be used (Tutorials for Excel are available from many sources). Turn in assignments as if an employee is giving it to a boss (but no formal memo is needed). Everything should be neat and adequately labeled (use $ signs, commas, underlines and double underlines appropriately). Be sure to include the company's name, the type of statement(s) being shown and the correct time period(s) involved. Please reread the academic honesty section. All excel assignments must be turned in through Canvas & electronically sent as an attachment. Portugal Corporation Consolidated Balance Sheet As of January 1, 2019 Consolidation Entries Debit Credit Portugal Sweden Consolidated Reference Balance Sheet Cash Accounts Receivable Inventory Land Buildings and Equipment Copyrights Investment in Sweden Total Assets $ 90,000 $ 110,000 $ 160,000 $ 40,000 $ 500,000 $ 290,000 $ 1,100,000 $ 140,000 $ 1,000,000 $ 420,000 $ 100,000 $ $ 500,000 $ $ 3,450,000 $1,000,000 $ $ 200,000 $ 40,000 $ 160,000 2-A $ 790,000 $ 1,240,000 $ 1,420,000 $ 100,000 $ 500,000 $ 2-B $ 540,000 $ 3,910,000 Accounts Payable Bonds Payable Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity $ 410,000 $ 200,000 $ 40,000 $ 1,040,000 $ 300,000 $ 1,000,000 $ 300,000 $ 300,000 $ 200,000 $ 50,000 $ 50,000 $ 800,000 $ 150,000 $ 150,000 $ 3,450,000 $ 1,000,000 $540,000 $ $ 570,000 2-A $ 1,340,000 $ 1,000,000 2-B $ 200,000 2-B $ 800,000 2-B $ 3,910,000 On January 1, 2019, Portugal Corporation bought 90% of the stock of Sweden Corporation for $500,000 (with cash). The NCI at date of acquisition was valued at $55,555.56. The Balance Sheets of the two companies immediately after Portugal acquired (January 1, 2019) Sweden Corporation showed the following amounts: Portugal Sweden Cash Accounts Receivable Inventory Land Buildings & Equipment - Net Copyrights Investment in Sweden Total Assets $ 90,000 $ 110,000 160,000 40,000 500,000 290,000 1,100,000 140,000 1,000,000 420,000 100,000 0 500,000 0 $3,450,000 $1,000,000 Accounts Payable Bonds Payable Common Stock Additional Paid in Capital Retained Earnings Total Liabilities and Stockholders' Equity $ 410,000 1,040,000 1,000,000 200,000 800,000 200,000 300,000 300,000 50,000 150,000 $3,450,000 $1,000,000 At the date of acquisition, Portugal owed Sweden $40,000. Also, on the date of acquisition the Book Value of the net assets of Sweden equaled its Fair Value. Any difference between the purchase price plus the value of the NCI and the Fair Value of the net assets is attributed to Goodwill. Portugal uses the equity method for its investment in Sweden. Required: 1. List all journal entries that Portugal made to record its investment in Sweden on the date of acquisition 2. List all Elimination Entries that would need to be made in order to prepare a workpaper for the consolidated Balance Sheet of Portugal and Sweden immediately after the combination (January 1, 2019). 3. Prepare a workpaper for the consolidated Balance Sheet of Portugal and Sweden immediately after the combination (January 1, 2019). Show all necessary elimination entries in their proper columns. Use a letter coding system for each elimination entry. Use Figure 5-2 for general format, and syllabus for additional formal requirements. CHECK FIGURE: Consolidated Assets = $3,965,555.56 Page 193 FIGURE 5-2 January 1, 20x1, Worksheet for Consolidated Balance Sheet, Date of Combination; 80 Percent Acquisition at More than Book Value Consolidation Entries Peerless Products Special Foods DR CR Consolidated Balance Sheet Cash $ $ 50,000 $ 90,000 125.000 50.000 Accounts Receivable Inventory Investment in Special Foods 40,000 75.000 100,000 310,000 60,000 5,000 165,000 0 240,000 70,000 Land 175.000 10,000 60,000 40.000 600.000 (300.000) Buildings & Equipment Less: Accumulated Depreciation Goodwill 300,000 800,000 (400,000) 300,000 225.000 1.160,000 (400,000) 12,500 $1,377,500 12,500 Total Assets $1,100,000 $500,000 $387,500 $610,000 100.000 100.000 Accounts Payable Bonds Payable Common Stock Retained Earnings NCI in NA of Special Foods 100,000 200,000 500.000 300.000 200,000 100.000 200,000 100,000 200.000 300.000 500,000 300,000 77.500 60,000 17,500 $ 77,500 Total Liabilities & Equity $1,100,000 $500,000 $300,000 $1,377,500 Two spreadsheet assignments must be done in teams of 2 students unless special permission is obtained from the instructor. Students must use Excel and formulas must be used (Tutorials for Excel are available from many sources). Turn in assignments as if an employee is giving it to a boss (but no formal memo is needed). Everything should be neat and adequately labeled (use $ signs, commas, underlines and double underlines appropriately). Be sure to include the company's name, the type of statement(s) being shown and the correct time period(s) involved. Please reread the academic honesty section. All excel assignments must be turned in through Canvas & electronically sent as an attachment. Portugal Corporation Consolidated Balance Sheet As of January 1, 2019 Consolidation Entries Debit Credit Portugal Sweden Consolidated Reference Balance Sheet Cash Accounts Receivable Inventory Land Buildings and Equipment Copyrights Investment in Sweden Total Assets $ 90,000 $ 110,000 $ 160,000 $ 40,000 $ 500,000 $ 290,000 $ 1,100,000 $ 140,000 $ 1,000,000 $ 420,000 $ 100,000 $ $ 500,000 $ $ 3,450,000 $1,000,000 $ $ 200,000 $ 40,000 $ 160,000 2-A $ 790,000 $ 1,240,000 $ 1,420,000 $ 100,000 $ 500,000 $ 2-B $ 540,000 $ 3,910,000 Accounts Payable Bonds Payable Common Stock Additional Paid In Capital Retained Earnings Total Liabilities & Equity $ 410,000 $ 200,000 $ 40,000 $ 1,040,000 $ 300,000 $ 1,000,000 $ 300,000 $ 300,000 $ 200,000 $ 50,000 $ 50,000 $ 800,000 $ 150,000 $ 150,000 $ 3,450,000 $ 1,000,000 $540,000 $ $ 570,000 2-A $ 1,340,000 $ 1,000,000 2-B $ 200,000 2-B $ 800,000 2-B $ 3,910,000 On January 1, 2019, Portugal Corporation bought 90% of the stock of Sweden Corporation for $500,000 (with cash). The NCI at date of acquisition was valued at $55,555.56. The Balance Sheets of the two companies immediately after Portugal acquired (January 1, 2019) Sweden Corporation showed the following amounts: Portugal Sweden Cash Accounts Receivable Inventory Land Buildings & Equipment - Net Copyrights Investment in Sweden Total Assets $ 90,000 $ 110,000 160,000 40,000 500,000 290,000 1,100,000 140,000 1,000,000 420,000 100,000 0 500,000 0 $3,450,000 $1,000,000 Accounts Payable Bonds Payable Common Stock Additional Paid in Capital Retained Earnings Total Liabilities and Stockholders' Equity $ 410,000 1,040,000 1,000,000 200,000 800,000 200,000 300,000 300,000 50,000 150,000 $3,450,000 $1,000,000 At the date of acquisition, Portugal owed Sweden $40,000. Also, on the date of acquisition the Book Value of the net assets of Sweden equaled its Fair Value. Any difference between the purchase price plus the value of the NCI and the Fair Value of the net assets is attributed to Goodwill. Portugal uses the equity method for its investment in Sweden. Required: 1. List all journal entries that Portugal made to record its investment in Sweden on the date of acquisition 2. List all Elimination Entries that would need to be made in order to prepare a workpaper for the consolidated Balance Sheet of Portugal and Sweden immediately after the combination (January 1, 2019). 3. Prepare a workpaper for the consolidated Balance Sheet of Portugal and Sweden immediately after the combination (January 1, 2019). Show all necessary elimination entries in their proper columns. Use a letter coding system for each elimination entry. Use Figure 5-2 for general format, and syllabus for additional formal requirements. CHECK FIGURE: Consolidated Assets = $3,965,555.56