Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
PART A . Prepare Consolidated Financial Statements In this part, you are given the relevant information about a hypothetic case of business combination between Alpha
PART A Prepare Consolidated Financial Statements In this part, you are given the relevant information about a hypothetic case of business combination between Alpha Inc. and Beta Inc.. On January Alpha Inc. Alpha acquired control over Beta Inc. Beta by acquiring of the shares of Beta for $ On the date of the acquisition, the equity in Beta comprised the following: This equity reflected the fair value of all the assets and liabilities of Beta, with the exception of land, which had a fair value of $ in excess of the carrying amounts, respectively. The following additional information is available: During the year ended December Beta sold inventory to Alpha at a price of $ This inventory had cost Beta $ As of December Alpha still had of the inventory in stock. During the year ended December Alpha sold inventory to Beta at a profit of $ This inventory had cost Alpha $ As of December Beta had all these inventories in stock. On January Beta sold an equipment to Alpha at a profit of $ Alpha has since depreciated the equipment on a straight line basis assuming a useful life of five years. During the year ended December Beta rented office space from Alpha at a cost of $ As of December Beta still owed $ of the rent. During the year ended December Beta declared and paid a dividend of $ The impairment tests on cash generating units at the end of and revealed that the recoverable amount of goodwill is $ $ and $ respectively Assume that the corporate tax rate is and impairment loss on goodwill is not tax deductible. Both companies have December year end. The financial statements of Alpha and Beta for the fiscal year ended December are provided in the Excel spreadsheet. Assume that Beta is Alpha's only subsidiary and the NCI equity is valued under Identifiable Net Asset INA method Please use the information above and data provided in the attached Excel sheet to prepare the consolidated Income Statement for the fiscal year ended on December consolidated Statement of Retained Earnings and Balance Sheet as at December
PART A
Prepare Consolidated Financial Statements
In this part, you are given the relevant information about a hypothetic case of business
combination between Alpha Inc. and Beta Inc..
On January
Alpha Inc.
Alpha
acquired control over Beta Inc.
Beta
by acquiring
of the shares of Beta for $
On the date of the acquisition, the equity in Beta
comprised the following:
This equity reflected the fair value of all the assets and liabilities of Beta, with the exception
of land, which had a fair value of $
in excess of the carrying amounts, respectively.
The following additional information is available:
During the year ended December
Beta sold inventory to Alpha at a price of $
This inventory had cost Beta $
As of December
Alpha still had
of the
inventory in stock.
During the year ended December
Alpha sold inventory to Beta at a profit of $
This inventory had cost Alpha $
As of December
Beta had all these
inventories in stock.
On January
Beta sold an equipment to Alpha at a profit of $
Alpha has since
depreciated the equipment on a straight
line basis assuming a useful life of five years.
During the year ended December
Beta rented office space from Alpha at a cost
of $
As of December
Beta still owed $
of the rent.
During the year ended December
Beta declared and paid a dividend of $
The impairment tests on cash
generating units at the end of
and
revealed
that the recoverable amount of goodwill is $
$
and $
respectively
Assume that the corporate tax rate is
and impairment loss on goodwill is not tax
deductible.
Both companies have December
year end.
The financial statements of Alpha and Beta for the fiscal year ended December
are provided in the Excel spreadsheet.
Assume that Beta is Alpha's only subsidiary and the NCI equity is valued under Identifiable
Net Asset
INA
method Please use the information above and data provided in the attached
Excel sheet to prepare the consolidated Income Statement for the fiscal year ended on
December
consolidated Statement of Retained Earnings and Balance Sheet as at
December
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started