Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please help me solve the 1-10 questions with specific steps. Parent acquired 90% of Subsidiary's stock for $60,000 in cash on January 1, 2017, when
please help me solve the 1-10 questions with specific steps.
Parent acquired 90% of Subsidiary's stock for $60,000 in cash on January 1, 2017, when Subsidiary's book value was $20,000. The fair value of the noncontrolling interest was $4,000. At the time of acquisition, all of Subsidiary's assets and liabilities were reported at fair value, except for PP&E which had a book value of $10,000 and a fair market value of $20,000 and a remaining useful life of 10 years. Subsidiary continuously sells inventory to Parent. I/CAR/ AP GP on Unsold Inventory Sales Inventory @ EOY 2020 $6,000 1,000 2019 $8,000 5,000 Complete the consolidation as of December 31, 2020. 1,000 2,000 Parent Sub Consol Totals Consolidation Entries dr/cr) Debits Credits Accounts Income Statement Sales Revenues Cost of goods sold 6,000 I-E 100,000 40,000 (50,000) (30,000) [1] 134,000 (70,000) 6,000 I-E 10,000 (8,000) [2] 4,500 [C] 2,000 Gross Profit 50,000 Operating Expenses (16,000) Equity in Sub's NI 4,500 Net Income 38,500 NI to Noncontrolling Interests NI to Controlling Interests Statement of Retained Eamings Retained Earnings, 1/1 25,000 [3] [4] [5] 8,600 8,600 [E] 25,000 8,600 [E] 25,000 [6] 8,600 2,000 (100) 10,500 100 [C Statement of Retained Eamings Retained Earnings, 1/1 25,000 Net income 38,500 Dividends paid (1,000) Retained Earnings, 12/62,500 Balance Sheet Current Assets 5,000 Inventory 3,000 Equity Investment 48,210 (1,000) 2,000 1,000 [7] 1,000 I-D 3,000 20,000 [8] [A] 1,000 [D] [9] PP&E, net 100,000 Goodwill Total Assets 156,210 Liabilities 83,710 Common Stock 10,000 Retained Earnings 62,500 Noncontrolling Interests 169,000 93,810 23,000 11,100 1,400 10,500 1,000 1-1 (10) Total Liabilities & Equi 156,210 23,000 169,000 Do not use "$", ".xx", abbreviated numbers, "Dr." or "Cr." Be sure to show the proper presentation. 1. Debit to Cost of Goods Sold (just show the debit JE amount that would go in this cell) 2. Consolidated Total - Operating Expenses 3. Consolidated Total - Net Income 4. Consolidated Total - Ni to Noncontrolling Interests 5. Consolidated Total - Ni to Controlling Interests 6. Consolidated Total - Net Income (in Retained Earnings) 7. Consolidated Total - Current Assets 8. Debit to PP&E, Net (just show the debit Je amount that would go in this cell) 9. Consolidated Total - Goodwill 10. Consolidated Total - Noncontrolling Interests Parent acquired 90% of Subsidiary's stock for $60,000 in cash on January 1, 2017, when Subsidiary's book value was $20,000. The fair value of the noncontrolling interest was $4,000. At the time of acquisition, all of Subsidiary's assets and liabilities were reported at fair value, except for PP&E which had a book value of $10,000 and a fair market value of $20,000 and a remaining useful life of 10 years. Subsidiary continuously sells inventory to Parent. I/CAR/ AP GP on Unsold Inventory Sales Inventory @ EOY 2020 $6,000 1,000 2019 $8,000 5,000 Complete the consolidation as of December 31, 2020. 1,000 2,000 Parent Sub Consol Totals Consolidation Entries dr/cr) Debits Credits Accounts Income Statement Sales Revenues Cost of goods sold 6,000 I-E 100,000 40,000 (50,000) (30,000) [1] 134,000 (70,000) 6,000 I-E 10,000 (8,000) [2] 4,500 [C] 2,000 Gross Profit 50,000 Operating Expenses (16,000) Equity in Sub's NI 4,500 Net Income 38,500 NI to Noncontrolling Interests NI to Controlling Interests Statement of Retained Eamings Retained Earnings, 1/1 25,000 [3] [4] [5] 8,600 8,600 [E] 25,000 8,600 [E] 25,000 [6] 8,600 2,000 (100) 10,500 100 [C Statement of Retained Eamings Retained Earnings, 1/1 25,000 Net income 38,500 Dividends paid (1,000) Retained Earnings, 12/62,500 Balance Sheet Current Assets 5,000 Inventory 3,000 Equity Investment 48,210 (1,000) 2,000 1,000 [7] 1,000 I-D 3,000 20,000 [8] [A] 1,000 [D] [9] PP&E, net 100,000 Goodwill Total Assets 156,210 Liabilities 83,710 Common Stock 10,000 Retained Earnings 62,500 Noncontrolling Interests 169,000 93,810 23,000 11,100 1,400 10,500 1,000 1-1 (10) Total Liabilities & Equi 156,210 23,000 169,000 Do not use "$", ".xx", abbreviated numbers, "Dr." or "Cr." Be sure to show the proper presentation. 1. Debit to Cost of Goods Sold (just show the debit JE amount that would go in this cell) 2. Consolidated Total - Operating Expenses 3. Consolidated Total - Net Income 4. Consolidated Total - Ni to Noncontrolling Interests 5. Consolidated Total - Ni to Controlling Interests 6. Consolidated Total - Net Income (in Retained Earnings) 7. Consolidated Total - Current Assets 8. Debit to PP&E, Net (just show the debit Je amount that would go in this cell) 9. Consolidated Total - Goodwill 10. Consolidated Total - Noncontrolling InterestsStep 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