Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please answer as soon as possible, thank you! the same question was posted 2 weeks ago and no one has answered it so far. Problem
please answer as soon as possible, thank you!
the same question was posted 2 weeks ago and no one has answered it so far.
Problem II. On January 1, 2017, Parent Co. acquired 80 % of Sub Inc. by paying S800,000. Non-controlling interest was valued at S200,000. Sub reported common stock on that date of $520,000 with retained earnings of $352,000. A building was undervalued in the company's financial records by $18,000. This building had a ten-year (10) remaining useful life. Copyrights of $80,000 were not recognized in the subsidiary's records and should be amortized over 20 years. Sub earned net income and paid cash dividends as follows over the years: Net Income Dividends Paid 2017 115,000 64,600 2018 144,400 71,600 2019 164,000 94,000 Instructions: . Prepare the allocation of the acquisition on January 1, 2017. In your presentation, but sure to show the excess fair value over cost allocated to the identifiable assets, and any resulting goodwill. In addition, for the identifiable assets, be sure to calculate the annual amortization of excess fair value over book value. Problem II. Continued. 2. Prepare journal entries that Parent is required to record associated with the investment under the Equity Method in 2019 Problem II. Continued. 3. Prepare the Consolidation Worksheet Entries at December 31, 2019 Consolidation Worksheet Entry S (note: Calculate Retained Earmings from 1/1/16 to 12/31/17 to derive Retained Earnings-S (1/1/19): lid rksheet Entry A: Consolidation Worksheet Entry I: Consolidation Worksheet Entry D Consolidation Worksheet Entry E: Problem II. Continued. 4. Using this partial spreadsheet below, post the relevant Consolidation Worksheet Entries from Question 3 above. Then, calculate for the period ended December 31, 2019 on the worksheet: (a) consolidated net income (b) non-controlling interest in Sub's net income (show your calculation separately) (c) net income to controlling interest. Consolidation Entries NCI Conso D Accounts Parent Sub Debit Credit Income Statement Revenues Cost of goods sold Depreciation Expense Amortization Expense Equity in Sub's carnings Separate Net Income (810,000) (504,000) 344,000 200,000 60,000 20,000 170,000 120,000 (126,560) (362,560) (164,000) Consolidated Net Income Non-Controlling Income Controlling Interest Income Show your calculation of the Non-controlling Income of the Subsidiary below 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