Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Pavin acquires all of Stabler s outstanding shares on January 1 , 2 0 2 1 , for $ 4 8 0 , 0 0
Pavin acquires all of Stablers outstanding shares on January for $ in cash. Of this amount, $ was attributed to equipment with a year remaining life and $ was assigned to trademarks expensed over a year period. Pavin applies the partial equity method so that income is accrued each period based solely on the earnings reported by the subsidiary.
On January Pavin reports $ in bonds outstanding with a carrying amount of $ Stabler purchases half of these bonds on the open market for $
During Pavin begins to sell merchandise to Stabler. During that year, inventory costing $ was transferred at a price of $ All but $at sales price of these goods were resold to outside parties by yearend. Stabler still owes $ for inventory shipped from Pavin during December.
The following financial figures are for the two companies for the year ending December Dividends were both declared and paid during the current year.
Accounts Pavin Stabler
Revenues $ $
Cost of goods sold
Expenses
Interest expensebonds
Interest incomebond investment
Loss on extinguishment of bonds
Equity in Stablers income
Net income $ $
Retained earnings, $ $
Net income above
Dividends declared
Retained earnings, $ $
Cash and receivables $ $
Inventory
Investment in Stabler
Investment in Pavin bonds
Land, buildings, and equipment net
Trademarks
Total assets $ $
Accounts payable $ $
Bonds payable
Discount on bonds
Common stock
Retained earnings above
Total liabilities and stockholders equity $ $
Required:
Prepare a worksheet to produce consolidated balances.
Note: For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started