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plz show how you do that. I am struggle! On January 1, 2020, Allan Company bought a 15 percent interest in Sysinger Company. The acquisition
plz show how you do that. I am struggle!
On January 1, 2020, Allan Company bought a 15 percent interest in Sysinger Company. The acquisition price of $228,500 reflected an assessment that all of Sysinger's accounts were fairly valued within the company's accounting records. During 2020, Sysinger reported net income of $123,500 and declared cash dividends of $36,700. Allan possessed the ability to significantly influence Sysinger's operations and, therefore, accounted for this investment using the equity method. On January 1, 2021, Allan acquired an additional 80 percent interest in Sysinger and provided the following fair-value assessments of Sysinger's ownership components: Consideration transferred by Allan for 80% interest Fair value of Allan's 15% previous ownership Noncontrolling interest's 5% fair value Total acquisition-date fair value for Sysinger Company $ 1,457,600 273, 300 91, 100 $ 1,822,000 Also, as of January 1, 2021, Allan assessed a $438,000 value to an unrecorded customer contract recently negotiated by Sysinger. The customer contract is anticipated to have a remaining life of four years. Sysinger's other assets and liabilities were judged to have fair values equal to their book values. Allan elects to continue applying the equity method to this investment for internal reporting purposes. At December 31, 2021, the following financial information is available for consolidation: Allan Company $(1,019, 600) 673,200 (52, 155) Sysinger Company $ (416, 000) 251, 600 $ $ Revenues Operating expenses Equity earnings of Sysinger Gain on revaluation of Investment in Sysinger to fair value Net income Retained earnings, January 1 Net income Dividends declared Retained earnings, December 31 Current assets Investment in Sysinger (equity method) Property, plant, and equipment Patented technology Customer contract Total assets Liabilities Common stock Additional paid-in capital Retained earnings, December 31 Total liabilities and equities 0 164, 400 (657, 600) (164, 400) 43, 600 (778, 400) 591, 300 $ $ (31, 780) $ 430, 335 (963, 600) (430, 335) 139, 900 $(1, 254, 035) $ 287, 500 1, 741, 635 865,000 890, 200 0 $ 3, 784, 335 $(1, 363, 300) (941, 000) (226,000) (1, 254, 035) $(3, 784, 335) 633,000 397, 400 $ 1,621, 700 $ (129, 300) (541, 000) (173,000) (778, 400) $(1,621, 700) a. How should Allan allocate Sysinger's total acquisition-date fair value (January 1, 2021) to the assets acquired and liabilities assumed for consolidation purposes? b. Calculate the following as they would appear in Allan's pre-consolidation 2021 statements. Equity in earnings of Sysinger Gain on revaluation of Investment in Sysinger to fair value . Investment in Sysinger c. Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2021. At year-end, there were no intra-entity receivables or payables. Complete this question by entering your answers in the tabs below. Reg A Req B1 Reg B2 Reg B3 Required C How should Allan allocate Sysinger's total acquisition-date fair value (January 1, 2021) to the assets acquired and liabilities assumed for consolidation purposes? Fair value of Sysinger 1/1/21 Book value of Sysinger 1/1/21 Excess fair value over book value To customer contract To goodwill 0 $ 0 Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req B3 Required C Calculate the Equity in earnings of Sysinger in Allan's pre-consolidation 2021 statements. 2021 net income Amortization Equity in earnings of Sysinger Complete this question by entering your answers in the tabs below. Reg A Req B1 Reg B2 Req B3 Required C Calculate the Gain on revaluation of Investment in Sysinger to fair value in Allan's pre-consolidation 2021 statements. Consideration transferred 2020 net income 2020 dividends Book value at 1/1/21 Fair value at 1/1/21 Gain on revaluation Complete this question by entering your answers in the tabs below. Reg A Req B1 Req B2 Reg B3 Required C Calculate the Investment in Sysinger in Allan's pre-consolidation 2021 statements. Fair value at 1/1/21 Consideration transferred 1/1/21 Equity earnings 2021 Net income Customer contract amortization Dividends Investment in Sysinger 12/31/21 ALLAN AND SYSINGER Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Accounts Debit Credit Noncontrolling Consolidated Interest Totals Revenues Allan Sysinger Company Company $ (1,019,600) $ (416,000) 673,200 251,600 (52,155) 0 (31,780) 0 $ 430,335 $ (164.400) Operating expenses Equity earnings of Sysinger Gain on revaluation of Investment in Sysinger to fair value Separate company net income Consolidated net income Ni attributable to noncontrolling interest NI attributable to Allan Company Retained earnings, January 1 Net income Dividends declared Retained earnings, December 31 Current assets Investment in Sysinger (equity method) Property, plant, and equipment Patented technology Customer contract Goodwill $ (963,600) $ (657,600) (430,335) (164,400) 139,900 43,600 $ (1,254,035) $ (778,400) $ 287,500 $ 591,300 1,741,635 0 865,000 633,000 890,200 397,400 0 0 0 Total assets Liabilities Common stock Additional paid in capital Retained earnings, December 31 NCI in Sysinger, 1/1 NCI in Sysinger, 12/31 Total liabilities and equities $ 3,784,335 $ $ (1,363,300) $ (941,000) (226,000) (1,254,035) 0 1,621,700 (129,300) (541,000) (173,000) (778,400) 0 0 0 $ (3,784,335) $ (1,621,700) $ 0 $ 0Step by Step Solution
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