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Please help me on the last part the WORKSHEET. THAT IS THE ONLY PART i DONT KNOW ALL THE ANSWERS Consolidation subsequent to date of

Please help me on the last part the WORKSHEET. THAT IS THE ONLY PART i DONT KNOW ALL THE ANSWERS

Consolidation subsequent to date of acquisitionEquity method with noncontrolling interest and AAP

Assume, on January 1, 2015, a parent company acquired a 90% interest in its subsidiary. The total fair value of the controlling and noncontrolling interest was $495,000 over the book value of the subsidiary's Stockholders' Equity on the acquisition date. The parent assigned the excess to the following [A] assets:

[A] Asset Original Amount Original Useful Life
Property, plant, and equipment $ 170,000 10 years
Customer list 100,000 5 years
Goodwill

225,000

Indefinite

$ 495,000

90% of the Goodwill is allocated to the parent. The parent and the subsidiary report the following pre-consolidation financial statements at December 31, 2019:

Parent Subsidiary Parent Subsidiary
Income statement: Balance sheet:
Sales $5,760,000 1,530,000 Assets
Cost of goods sold

(4,000,000)

(960,000)

Cash $ 400,000 $ 90,000
Gross profit 1,760,000 570,000 Accounts receivable 752,000 200,000
Equity income 119,700 Inventory 960,000 440,000
Operating expenses (1,120,000) (400,000) Equity investment 936,000
Net income 759,700 170,000 Property, plant and equipment, net 2,240,000 720,000
Statement of retained earnings:

$ 5,288,000

$ 1,450,000

Beginning retained earnings: 1,408,300 400,000 Liabilities and stockholders' equity
Net income 759,700 170,000 Accrued liabilities 800,000 320,000
Dividends

(160,000)

(40,000)

Long-term liabilities 1,600,000 400,000
Ending retained earnings

$2,008,000

$ 530,000

Common stock 160,000 80,000
APIC 720,000 120,000
Retained earnings

2,008,000

530,000

$ 5,288,000

$1,450,000

b. Calculate and organize the profits and losses on intercompany transactions and balances.

(No intercompany transactions)

c. Compute the pre-consolidation Equity Investment account beginning and ending balances starting with the stockholders' equity of the subsidiary.

Equity investment account at 1/1/19
p% book value of subsidiary's net assets Answer

Unamortized p% AAP Answer

Answer

Equity investment account at 12/31/19
p% book value of subsidiary's net assets Answer

Unamortized p% AAP Answer

Answer

d. Reconstruct the activity in the parent's pre-consolidation Equity Investment T-account for the year of consolidation.

Equity Investment
Answer

Answer

Answer

Answer

Answer

Answer

e. Independently compute the owners' equity attributable to the noncontrolling interest beginning and ending balances starting with the owners' equity of the subsidiary.

Noncontrolling interests at 1/1/19
nci% book value of subsidiary's net assets Answer

Unamortized nci% AAP Answer

Answer

Noncontrolling interests at 12/31/19
nci% book value of subsidiary's net assets Answer

Unamortized nci% AAP Answer

Answer

f. Independently calculate consolidated net income, controlling interest net income and noncontrolling interest net income. Note:Use a negative sign with your answer to indicate a reduction to net income.

Parent's stand-alone net income Answer

Subsidiary's stand-alone net income Answer

100% AAP amortization Answer

Consolidated net income Answer

Parent's stand-alone net income Answer

p% of subsidiary's stand-alone net income Answer

p% AAP amortization Answer

Consolidated net income attributable to the controlling interest Answer

nci% of subsidiary's stand-alone net income Answer

nci% AAP amortization Answer

Consolidated net income attributable to the noncontrolling interest Answer

g. Complete the complete the consolidation worksheet. Note: Use negative signs with your answers in the Consolidated column when appropriate (Cost of goods sold, Operating expenses and Dividends).

Consolidation Entries
Parent Subsidiary Dr Cr Consolidated
Income Statement:
Sales $5,760,000 $1,530,000 Answer

Cost of Goods sold

(4,000,000)

(960,000)

Answer

Gross profit 1,760,000 570,000 Answer

Income (loss) from subsidiary 119,700 [C] Answer

Answer

Operating expenses

(1,120,000)

(400,000)

[D] Answer

Answer

Net Income

$759,700

$170,000

Answer

Consolidated NI atrib to NCI [C] Answer

Answer

Consolidated NI attrib to CI

Answer

Statement of Ret Earnings:
BOY retained earnings $1,408,300 $400,000 [E] Answer

Answer

Net income 759,700 170,000 Answer

Dividends

(160,000)

(40,000)

Answer

[C] Answer

EOY retained earnings

$2,008,000

$530,000

Answer

Balance Sheet:
Cash $400,000 $90,000 Answer

Accounts receivable 752,000 200,000 Answer

Inventory 960,000 440,000 Answer

Equity investment 936,000 Answer

[C] Answer

Answer

[E]
Answer

[A]
PPE, net 2,240,000 720,000 [A] Answer

Answer

[D] Answer

Customer List [A] Answer

Answer

[D] Answer

Goodwill [A] Answer

Answer

$5,288,000

$1,450,000

Answer

Current liabilities $800,000 $320,000 Answer

Long-term liabilities 1,600,000 400,000 Answer

Common stock 160,000 80,000 [E] Answer

Answer

APIC 720,000 120,000 [E] Answer

Answer

Retained earnings 2,008,000 530,000 Answer

Noncontrolling interest Answer

[C] Answer

Answer

[E]

Answer

[A]

$5,288,000

$1,450,000

Answer

Answer

Answer

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