Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Plaza, Inc., acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1, 2021. in exchange for $1,007,100 cash. At the acquisition

image text in transcribed
image text in transcribed
Plaza, Inc., acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1, 2021. in exchange for $1,007,100 cash. At the acquisition date, Stanford's total fair value. Including the noncontrolling interest, was assessed at $1,258,875. Also at the acquisition date. Stanford's book value was $533.800 Several individual items on Stanford's financial records had fair values that differed from their book values as follows: Book Value $272,600 Fair value $405,100 Trade names (indefinite life) Property and equipment (net, 3-year remaining life) Patent (14-year remaining life) 225,6ee 120, 4ee 244,500 161, 288 For internal reporting purposes. Plaza, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2021. for both companies Revenues Cost of goods sold Depreciation expense Anortization expense Equity in income of Stanford Net income Plaza $($29,600) 450, see 194,400 Stanford 5 (681, 100) 3ee,200 28, 288 21, 2ee @ 5 (931,600) (261,600 $(433,200) Retained earnings, 1/1/21 Tiet income Dividends declared Retained earnings, 12/31/21 $ (966, See) (438,200 227.400 $(1,177,00) $ (401,300) (331,60e) 24, De 5 (708,300) $327,3ee Current assets Investment in Stanford Trade names Property and equipment (net) Patents Total assets $ 652, cee 1,249,500 182, eee 751,100 e $ 2,044,600 272. Gee 197,400 1e9, 100 5900,400 Accounts payable Comon stock Additional paid in capital Retained earnings (above) Total 11abilities and equities $(107,7ee (227,500) (1,252,10 (1,172,200 52,064,600) 5 (65,eee) (118, eee (14,500) (7029) 5 (906) 400 At year-end, there were no intra-entity receivables or payables. Prepare a worksheet to consolidate the financial statements of Plaza. Inc and its subsidiary Stanford (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 os positive values.) At year-end, there were no Intra-entity receivables or payables. Prepare a worksheet to consolidate the financial statements of Plaza, Inc., and its subsidiary Stanford. (For accounts where multiple consolidation entries are required, combine all deblt 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.) Noncontrolling Interest Consolidated Totals PLAZA CORPORATION AND STANFORD CORPORATION Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Plaza Stanford Debit Credit S (829,600) S (681.100) 458,600 300,000 194.400 28.200 0 21,300 (261,600) 0 $ (438.200 $ (331.600) $ Accounts Revenues Cost of goods sold Depreciation expense Amortization expense Equity in income of Stanford Net income Consolidated net income NCI share of CNI Plaza share of CNI Retained earnings, 1/1/21 Net Income Dividends declared Retained earnings, 12/31/21 Current assets Investment in Stanford Tradenames Property and equipment (nel) Patents Goodwill Total assets Accounts payable Common stock Additional paid in capital Noncontrolling interest Retained earnings, 12/31 Total liabilities and equities 5 5 (966,500) 5 (401.300) (438,200) (331.600) 227.400 24,000 (1.177,300) s (708 900) 652,000 $ 327,300 1,249,500 0 182,000 272.600 781 100 197.400 0 109.100 $ $ 2,864,600 (107 700) (227,500) (1.352.100) 906,400 (65,000) (118,000) (14,500) (1.177.300) (2,864,600) 5 (708,900) S (906,400) 0 $ 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Endangered Economies How The Neglect Of Nature Threatens Our Prosperity

Authors: Geoffrey Heal

1st Edition

0231180845, 9780231180849

More Books

Students also viewed these Accounting questions

Question

What perspective or approach to talent would be appropriate?

Answered: 1 week ago

Question

What policies and practices for talent development are needed now?

Answered: 1 week ago