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Pop Corporation acquired 70 percent of Sode Company's voting common shares on January 1, 202, for $119,000. At that dete, the noncontrolling interest had a
Pop Corporation acquired 70 percent of Sode Company's voting common shares on January 1, 202, for $119,000. At that dete, the noncontrolling interest had a fer velue of $51,000 end Sode reported $70,000 of common stock outstanding end retained earnings of $33,000. The differentiel is assigned to buildings end equipment, which had a fair value $29,000 higher then book value and e remaining 10-year life, and to petents, which had a fer velue $38.000 higher then book value end a remaining life of five years at the dete of the business combination. Triel belences for the companies as of December 31, 20x3, ere as follows: Item Cash & Accounts Receivable Inventory Land Buildings & Equipment Investment in Soda Company Cost of Goods Sold Depreciation Expense Interest Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Bond Preet Common Stock Retained Earnings Sales Other Income Income from Soda Comparty Pop Corporation Debit Creat Safe Company Debit Credit $ 18,400 160,000 83,000 370,000 117,235 $24,600 30,000 43,000 263,000 189,000 82,800 20,000 15,000 19,000 33,000 8,200 18,000 $ 143,000 $ 75,000 55,400 38,000 248,750 110,000 1,600 123,000 70,000 130,900 63,000 263,000 135,000 12,600 8,945 $1,017,635 $1,017,635 $492,600 $492,600 On December 31, 202, Soda purchased inventory for $31,200 and sold it to Pop for $48,000. Pop resold $30,000 of the inventory fie, $30,000 of the $48,000 acquired from Sodaj during 20X3 and had the remaining balance in inventory at December 31, 20x3. During 20x3, Soda sold inventory purchased for $65,000 to Pop for $100,000, and Pop resold all but $29,000 of its purchase. On March 10, 20x3, Pop sold inventory purchased for $17,000 to Soda for $34,000. Soda sold all but $8,500 of the inventory prior to December 31, 20x3. Assume Pop uses the fully adjusted equity method, that both companies use straight-line depreciation, and that no property, plant, and equipment has been purchased since the acquisition. Income Statement Sales Other Income Less: COGS Less: Depreciation Expense Less: Interest Expense Less: Amortization Expense Income from Soda Company Consolidated Net Income Consolidation Entries Pop Corp. Soda Co. DR. CR Consolidated 0 0 01 0 0 NCI in Net Income Controlling Interest in Net Income $ 0 $ 0 S 0 $ 0 $ 0 Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance $ 0 $ 0 $ 0 $ 0 $ 0 Balance Sheet Cash and Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation Investment in Soda Company Patents Total Assets Accounts Payable Bonds Payable Bonds Premium Common Stock Retained Earnings NCI in NA of Soda Company Total Liabilities & Equity $ 0 S 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
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