Question

1 Approved Answer

Posted on Jun 28, 2024

Please help me!! Peerless Corporation purchases 70% of Special Foods Corporation's outstanding Common Stock $205,000. for $560,000, on 01/01/X1. At the date of acquisition, Special

Please help me!!

Peerless Corporation purchases 70% of Special Foods Corporation's outstanding Common Stock $205,000. for $560,000, on 01/01/X1. At the date of acquisition, Special had accumulated depreciation of Special reported net income for 20X1 of $160,000 and paid dividends of $26,000. Peerless' purchase of Special's net assets showed Fair Value exceeding Book Value by $135,000. Assets that had higher values were Inentory, $30,000; Land $100,000; and Building, $25,000. It was determined that goodwill was impaired by $100,000. All of the inventory was sold during 20X1. The Building has 5 years remaining on its usesful life and Special uses straight line depreciation. Equity at 20X1 for Special was Common Stock, $200,000 and Retained Earnings, $100,000. 16 - Prepare the Book Value Calculations on the provided worksheet. 17 - Prepare the Basic Consolidation Entry on the Journal Entry Form below. 18 - Prepare the Excess Value (Differential) Calculations on the provided worksheet. 19 - Prepare the Amortized Value Reclassification Entry on the Joirnal Entry Form below. 20 - Prepare the Excess Value (Differential) Reclassification Entry on the Journal Entry Form below. 21 - Prepare the Accumulated Depreciation Consolidated Entry on the Journal Entry Form below. 22 - Prepare the 3-Part Consolidation Worksheet, attached. Problem # 16 10 points Book Value Calculations: NCI Peerless Corp Common Retained 70% Stock Earnings Beginning Book Value + Net Income - Dividends Ending Book Value o Problem # 17 (10 Points) Prepare the Basic Consolidation Entry on the Journal Entry Form below Problem # 18 10 points Excess Value (Differential) Calculations: NCI Pie Corp Buildings & Accum 30% 70% Inventory Land Equipment Depreciation Good will Beginning Balance Changes Ending Balance Problem # 19 (10 Points) Prepare the Amortized Excess Value Reclassification Entry on Journal Entry Form below. Problem # 20 (10 Points) Prepare the Excess Value (Differential) Reclassification Entry on the Journal Entry Form below. Problem # 21 (10 Points) Prepare the Accumulated Depreciation Entry on the Journal Entry form below. Problem # 22 Prepare the Consolidated 3-part Worksheet below. 10 points Consolidated Worksheet - Initial Year of Ownership December 31, 20x1, Initial Year of Ownership, 70% acquisition at More than Book value Ulation Entries De.NCI Peerless Corp Common Retained 30%% 70%% Stock Earnings Beginning Book Value + Net Income . Divid Endin Rotate Problem # 17 (10 Points) Prepare the Basic Consolidation Entry on the Journal Entry Form below. Problem # 18 10 points Excess Value (Differential) Calculations: NCI Pie Corp Buildings & Accum 30% 70% Inventory Land Equipment Depreciation Goodwill Beginning Balance Changes Ending Balance Problem # 19 (10 Points) Prepare the Amortized Excess Value Reclassification Entry on Journal Entry Form below. Problem # 20 (10 Points) Prepare the Excess Value (Differential) Reclassification Entry on the Journal Entry Form below. Problem # 21 (10 Points) Prepare the Accumulated Depreciation Entry on the Journal Entry form below. Problem # 22 Prepare the Consolidated 3-part Worksheet below. 10 points Consolidated Worksheet - Initial Year of Ownership December 31, 20x1, Initial Year of Ownership, 70% acquisition at More than Book value Consolidation Entries Peerless Special Dr CR Consolidated Income Statement Sales 400,000 300,000 700,000 Less: COGS 170,000 -105,000 275,000 Less: Depreciation Expense -50,000 -20,000 -70,000 Less: Other Expenses 40.000 -15.000 -55,000 Less: Impairment Loss Income from Special Foods 17.500 17.500 Consolidated Net Income 157.500 160,000 317,500 NCI in Net Income Controlling Interest in Net Income 157.500 160,000 317,500 Statement of Retained Earnings Beginning Balance 300,000 100,000 400,000 Net Income 157.500 160,000 317.500 Less:Dividends Declared -60.000 -26.000 -86.000 Ending Balance 397.500 234,000 631.500 Balance Sheet Cash 175.500 120,000 295.500 Accounts Receivable 75,000 93.000 168,000 Inventory 100,000 121,000 221,000 Investment in Special Foods $59,000 559,000 Land 175,000 75,000 250,000 Buildings & Equipment 528,000 475,000 1,003,000 Less: Accumulated Depreciation 400.000 -225,000 -625.000 Goodwill Total Assets 1,212,500 659,000 1,871.500 Accounts Payable 115,000 100,000 215,000 Bonds Payable 200,000 125,000 325,000 Common Stock 500,000 200,000 700,000 Retained Earnings 397,500 234,000 631.500 NCI in NA of Special Foods Total Liabilities & Equity 1.212.500 659,000 1,871.500