Problem 2 Owl Corporation acquired 90% of Barn Corporation on January 1, 2005 for $72,000 cash when Barn's stockholders' equity consisted of $30,000 of Common
Problem 2
Owl Corporation acquired 90% of Barn Corporation on January 1, 2005 for $72,000 cash when Barn's stockholders' equity consisted of $30,000 of Common Stock and $30,000 of Retained Earnings. The difference between the price paid by Owl and the underlying equity acquired in Barn was allocated to a plant asset with a remaining 10-year straight-line life that was overvalued by $5,000. The remainder was attributable to goodwill. The separate company statements for Owl and Barn appear in the first two columns of the partially completed consolidation working papers.
Required:
1. Write down eliminating entries for the consolidation worksheet;
2. Insert eliminating entries into the consolidation worksheet;
BETA A docs.google.com C Advanced Management Accouting (Text, Problems & Cases) - Jawahar Lal - Googl... Homework Help - Q&A from Online Tutors - Course Hero Ex 2_2 - Google Docs Ex 2 2 * Q 6 Share G File Edit View Insert Format Tools Add-ons Help Last edit was made 2 minutes ago by anonymous 100% Normal text Times New... 10 ... A 1 Problem 2 Owl Corporation acquired 90% of Barn Corporation on January 1, 2005 for $72,000 cash when Barn's stockholders' equity consisted of $30,000 of Common Stock and $30,000 of Retained Earnings. The difference between the price paid by Owl and the underlying equity acquired in Barn was allocated to a plant asset with a remaining 10-year straight-line life that was overvalued by $5,000. The remainder was attributable to goodwill. The separate company statements for Owl and Barn appear in the first two columns of the partially completed consolidation working papers. Required: 1. Prepare all eliminating entries for the consolidation worksheet; 2. Insert eliminating entries into the consolidation worksheet; Eliminations Consol- Owl Barn Debit Credit idated INCOME STATEMENT Sales $ 60,000 $22,000 Income from Barn 3,510 Cost of Sales 13,000) 9,500) Depreciation Expense 2,000) 3,000 Other Expenses (23,000) ( 6,100) Net income 25,510 3,400 Retained Earnings 1/1 25,000 30,000 Add: Net income 25,510 3.400 2 Less: Dividends 15,000) 3,000) + BETA A docs.google.com C Advanced Management Accouting (Text, Problems & Cases) - Jawahar Lal - Googl... Homework Help - Q&A from Online Tutors - Course Hero Ex 2_2 - Google Docs Ex 2 2 * Q 6 Share G File Edit View Insert Format Tools Add-ons Help Saving. 100% Normal text Times New. 10 Y B I U A . G + ME. BEEBEEX ... A 1 1 1 1 1 1 1 1:1 12 1 1 . |: 3 : 7 Net income 25,510 3,400 Less: Dividends 15,000) 3,000) Retained Earnings 12/31 $ 35,510 $30.400 BALANCE SHEET Cash 26,520 7.000 Accounts Receivable-net 22,000 10.000 Inventories 20,000 14.000 Land 27,000 42,000 Equipment and Buildings-net 70,000 38,000 Investment in Barn Corporation 72,810 TOTAL ASSETS $ 238,330 $111,000 TOTAL ASSETS 11 LIAB. & EQUITY Accounts payable 32,820 50.600 Capital Stock 170,000 30.000 Retained Earnings 35,510 30,400 O + BETA A docs.google.com C Advanced Management Accouting (Text, Problems & Cases) - Jawahar Lal - Googl... Homework Help - Q&A from Online Tutors - Course Hero Ex 2_2 - Google Docs Ex 2 2 * Q S 6 Share G File Edit View Insert Format Tools Add-ons Help All changes saved in Drive 100% Normal text Times New... 10 B I U A GAME . BE EE EE X ... A Minority Interest Earnings TOTAL LIAB. & $ EQUITY 238,330 |$111,000 C +
