Part A (questions 1 through 25) The following information and table pertain to questions 1 through 25 OnJanuary 1 2010, Apple Company acquired 75% of the outstanding common stock of Orange Company or $600,000 n cash. On the date of the acqu sition, the fair walue of the 25% noncontrolling interest in the Orange Company was $200,000. The book value of Orange Company's net assets on January 1, 2010, was $500,000 and consisted of common stock of $150,000 and retained earnings of $350,000. Some of Orange Company assets were internally developed and were not reported on its books or had fair value that differed from it carrying value on the date of the acquisition as follows: Book Values 50,000 Fair Values 150,000 Patented Technologies (10 years of remaining life) Customer List (5 years of 75,000 | remaining life) Any remaining excess acquisition-date fair value was assigned to goodwill. Since acquisition, Apple has not had any goodwill impairments Intra-entity inventory sales between the two companies have been made as follows: Year 2010 2011 Cost to Apple 130,000 150,000 Transfer Price to Orange 180,000 210,000 Ending Balance(at transfer price) 45,000 Presented below are the financial statements for these two companies as of December 31, 2011, prepared from their separately maintained accounting systems. Credit balances are indicated by parentheses. APPLE COMPANY AND CONSOLIDATED ORANGE SUBSIDIARY Consolidation Worksheet For Year Ending December 31, 2011 Apple Orange Company Company 12/31/2011 12/31/2011 S (950,000) (480,000) Consolidation Entries Credit Noncontrolling Consolidated Debit Interest Totals Sales Cost of goods sold 550,000 280,000 Operating Expense Income from Orange Company 210,000 110,000 (41.250) Separate Company Net income S (231.250 $ Consolidated Net Income To noncontrolling interest To parent company (770,000) $(450,000) (231,250) 90,000) 40,000 (911.250) (500,000) Retained earnings, 1/1/11 Net income Dividends paid 90,000 Retained earnings, 12/31/11 Cash and Receivables Inventory Investment in Orange Company S 310,000 $105,000 255,000 375,000 655,000 Equipment (net) Building (net) Patent (net) Customer List Goodwill 266,000 112,000 222,000 40,000 307,000 Total assets S 1,913,000 $ 734,000 Liabilities Common stock S (401,750) (84,000) (600,000) 150,000) Noncontrolling Interest 1/1/11 Noncontrolling Interest 12/31/11 Retained earnings, 12/31/11 11,250 500,000 Total liabilities and equities S (1,913,000) $ (734,000 The amount on the Inventory account that should be reported on the Consolidated Statement of Financial Position (balance sheet) dated December 31, 2011 should be: 375,000 ioni 255,000 610,000 630.000 O None of the answers is correct The amount on the "Common Stock" account that should be reported on the Consolidated Statement of Financial Position (balance sheet) dated December 31, 2011 should be: 600,000 150,000 750,000 450,000 None of the answers is correct O The consolidated amount of Retained Earnings on 1/1/2011 should be (1,220,000) O (450,000) O (770,000) (500,000) O None of the answers is correct The amount of the Stockholders' Equity attributable to the noncontrolling party on the Consolidated Statement of Financial Position (balance sheet) dated December 31, 2011 should be: (1,511,250) (1,736,250) O (235,000) (225,000) O None of the answers is correct The amount of the Stockholders' Equity attributable to the parent company on the Consolidated Statement of Financial Position (balance sheet) dated December 31, 2011 should be: O (1,511,250) (1,736,250 (235,000) O (225,000) O None of the answers is correct The amount of Total Assets on the Consolidated Statement of Financial Positionbalance sheet) dated December 31, 2011 should be 1,913,000 734,000 on O 2,647,000 O 2,222.000 O None of the answers is correct