Please assist with the following! Thanks!
NOTE: THE DIVIDEND THAT IS CUT OFF IS $7,000.00 AND THE DIFFERENTIAL TABLE CAN BE SEEN IF YOU SOON THE PAGE IN. I COULD NOT GET. LARGER FONT TO FIT WITHOUT CUTTING THE GRAPH IN HALF. IT WANTS THE DIFFERENTIAL OF 1/1/08.
THE LAST TABLES ARE FOR THE EQUITY AND ELIMINATING ENTIRES AS OF DECEMBER 31ST, 2008. ACCOUNT NAMES NOT PROVIDED.
Requirements:
1.) The differential table as of the date of acquisition and complete the amortization expense columns for 2001-2008.
2.) The differential balance as of 1/1/2008.
3.) All applicable equity method entries for the year ended, December 31, 2008.
4.) The elimination entries as of December 31, 2008.
Parent Corporation holds 75% of the common stock of Subsidiary Distributors, Inc., purchased on December 31, 2001, for $2,400,000. At the date of acquisition, Subsidiary reported common stock with a par value of $1,000,000, additional paid-in-capital of $1,300,000, and retained earnings of $650,000. The fair value of the non-controlling interest at Inventory (all sold in 2002) Land Goodwill Total Differential 38,000 62,000 60,000 160,000 Throughout 20X8, Parent sold merchandise to Subsidiary, Subsidiary sold 60% of the inventory by Cost of Inventory to Parent $ 475,000 Sale Price of Inventory to Subsidary $ 620,000 On January 1, 2008, Parent's inventory contained inventory purchased from Subsidiary, which had produced the inventory. By December 31, 2008, Parent had sold all inventory that had been on hand Cost of Inventory to Subsidary $ 420,000 Sale Price of Inventory to Parent $ 490,000 During 2002, Parent sold a plot of land that it had purchased several years before to Subsidiary; Subsidiary continues to hold the land. Cost of Land to Parent $ 445,000 Sale Price of Land to Subsidary $ 345,000 On January 1, 2008, Parent purchased equipment from Subsidiary. Subsidiary had purchased that equipment on December 31, 2002. The equipment is expected to have a total 15-year life and no salvage value. Both entities use the straight-line method of depreciation and amortization. Cost of Equipment to Subsidary $ 400,000 Sale Price of Equipment to Parent $ 475,000 On January 1, 2006, Parent sold par value, 10 percent, five-year bonds at 115 directly to Subsidiary. The bonds pay interest annually on December 31. Both entities amortize bond premiums Par Value of Bonds $ 380,000 Subsidiary issued par value 10-year bonds with a coupon rate of 10 percent on January 1, 2005. On December 31, 2007, Parent purchased par value of Subsidiary's bonds. Interest payments are made on July 1 and January 1. Both entities amortize bond premiums and discounts on a straight-line Par Value of Bonds $ 400,000 Bond Issue Price $ 395,000 Percentage of Bonds Outstand 40% Purchased Purchase Price of Bond Investment $ 182,000 As of December 31, 2008, Subsidiary had declared but not yet paid its fourth-quarter dividend of $7, On December 31, 2008, applicable information from the pre-closing trial balances of Parent and Subsidiary appeared in T-Accounts as follows: As of December 31, 2008, Subsidiary had declared but not yet paid its fourth-quarter dividend of $7, On December 31, 2008, applicable information from the pre-closing trial balances of Parent and Subsidiary appeared in T-Accounts as follows: SUBSIDIARY Common Stock $ 1,000,000 R/E $ 1,400,000 Beg. Balance Declared Dividends $ 20,000 $ 110,000 Net Income $1,000,000 $ 1,490,000 APIC $1,350,000 $ 1,350,000 Instructions: the differential table as of the date of acquisition and complete the amortization expense columns for 2001-2008. Be sure to prepare a complete table and do not leave cells blank - put a zero or a "------". Book Value Fair Value Differential Life 2001 2002 2003 2004 2005 2006 2007 2008 Requirement 2: Give the differential balance as of 1/1/2008. Differential Balance on 1/1/2008: Requirement 4: Prepare all applicable equity method entries for the year ended, December 31, 2008. Please label each journal e Equity Method Entries Requirement 5: Prepare the elimination entries as of December 31, 2008. Please label each journal entry. Elimination Entries Parent Corporation holds 75% of the common stock of Subsidiary Distributors, Inc., purchased on December 31, 2001, for $2,400,000. At the date of acquisition, Subsidiary reported common stock with a par value of $1,000,000, additional paid-in-capital of $1,300,000, and retained earnings of $650,000. The fair value of the non-controlling interest at Inventory (all sold in 2002) Land Goodwill Total Differential 38,000 62,000 60,000 160,000 Throughout 20X8, Parent sold merchandise to Subsidiary, Subsidiary sold 60% of the inventory by Cost of Inventory to Parent $ 475,000 Sale Price of Inventory to Subsidary $ 620,000 On January 1, 2008, Parent's inventory contained inventory purchased from Subsidiary, which had produced the inventory. By December 31, 2008, Parent had sold all inventory that had been on hand Cost of Inventory to Subsidary $ 420,000 Sale Price of Inventory to Parent $ 490,000 During 2002, Parent sold a plot of land that it had purchased several years before to Subsidiary; Subsidiary continues to hold the land. Cost of Land to Parent $ 445,000 Sale Price of Land to Subsidary $ 345,000 On January 1, 2008, Parent purchased equipment from Subsidiary. Subsidiary had purchased that equipment on December 31, 2002. The equipment is expected to have a total 15-year life and no salvage value. Both entities use the straight-line method of depreciation and amortization. Cost of Equipment to Subsidary $ 400,000 Sale Price of Equipment to Parent $ 475,000 On January 1, 2006, Parent sold par value, 10 percent, five-year bonds at 115 directly to Subsidiary. The bonds pay interest annually on December 31. Both entities amortize bond premiums Par Value of Bonds $ 380,000 Subsidiary issued par value 10-year bonds with a coupon rate of 10 percent on January 1, 2005. On December 31, 2007, Parent purchased par value of Subsidiary's bonds. Interest payments are made on July 1 and January 1. Both entities amortize bond premiums and discounts on a straight-line Par Value of Bonds $ 400,000 Bond Issue Price $ 395,000 Percentage of Bonds Outstand 40% Purchased Purchase Price of Bond Investment $ 182,000 As of December 31, 2008, Subsidiary had declared but not yet paid its fourth-quarter dividend of $7, On December 31, 2008, applicable information from the pre-closing trial balances of Parent and Subsidiary appeared in T-Accounts as follows: As of December 31, 2008, Subsidiary had declared but not yet paid its fourth-quarter dividend of $7, On December 31, 2008, applicable information from the pre-closing trial balances of Parent and Subsidiary appeared in T-Accounts as follows: SUBSIDIARY Common Stock $ 1,000,000 R/E $ 1,400,000 Beg. Balance Declared Dividends $ 20,000 $ 110,000 Net Income $1,000,000 $ 1,490,000 APIC $1,350,000 $ 1,350,000 Instructions: the differential table as of the date of acquisition and complete the amortization expense columns for 2001-2008. Be sure to prepare a complete table and do not leave cells blank - put a zero or a "------". Book Value Fair Value Differential Life 2001 2002 2003 2004 2005 2006 2007 2008 Requirement 2: Give the differential balance as of 1/1/2008. Differential Balance on 1/1/2008: Requirement 4: Prepare all applicable equity method entries for the year ended, December 31, 2008. Please label each journal e Equity Method Entries Requirement 5: Prepare the elimination entries as of December 31, 2008. Please label each journal entry. Elimination Entries
