Push Corporation paid $16,200 for a 90% interest in Swish Corporation on January 1, 2019, when Swish stockholders' equity consisted of $10,000 Capital Stock and $3,000 of Retained Earnings. The excess cost over book value was attributable to goodwill. Assume proportional pricing for the NCI. Additional information: 1. Push sells merchandise to Swish at 120% of Push's cost. During 2019, Push's sales to Swish were $4,800, of which half of the merchandise remained in Swish's inventory at December 31, 2019 (The 2019 ending inventory was sold in 2020.) During 2020, Push's sales to Swish were $6,000 of which 60% remained in Swish's inventory at December 31, 2020. At year-end 2020, Swish owed Push $1,500 for the inventory purchased during 2020. 2. Push Corporation sold equipment with a book value of $2,000 and a remaining useful life of four years and no salvage value to Swish Corporation on January 1, 2020 for $2,800. Straight-line depreciation is used. 3. During 2020, Swish sold to Push land for $50,000 that had a book value of $20,000. Push still owns the land at 12/31/20. 4. Separate company financial statements for Push Corporation and Subsidiary at December 31, 2020 are summarized in the first two columns of the consolidation working papers. See Spreadsheet Tab. FOR ANY CALCULATION, DO NOT ROUND AMOUNTS Required: Carefully Follow and label each step ON THE SPREADSHEET TAB. Points 1. Prepare the acquisition analysis as of acquisition date. Compute the unamortized acquisition differential as of 1/1/2019. Goodwill is not considered impaired at 12/31/20. 10 2. Analyze each intercompany transaction. Label as either upstream or downstream. Determine amounts of profit that are unrealized and/or realized for 2020. 15 3. SEPARATELY calculate Net income to the controlling interest for the year 2020 20 4. Verify the calculation of the balance in the account equity in sub earnings and record the parent company entries with respect to its investment during 2020 20 5. Prepare all elimination/consolidation entries for 2020 20 6. Complete the consolidating spreadsheet for the year ended December 31, 2020. 15 TOTAL 100 S CONS. TOT. ELIMINATIONS Dr Cr 14,000 INCOME STATEMENT EYE 12/31120 Sales Equity in sub earnings gain on sale of equip Gain on sale of land Total revenues 60,000 4,600 DO ALL YOUR SUPPORTING WORK ON THIS WORKSHEET. DO NOT RECREATE CONSOLIDATION WORKPAPERS LABEL EACH ANSWER TO QUESTION DETAILS AND THEN INPUT RESPONSES ON THE RED TAB Do not change any pre-existing formulas on the consolidation spreadsheet. YOU MUST USE APPROPIATE FORMULAS INCLUDING CELL REFERENCES THAT DOCUMENT SUPPORTING WORK FOR CONSOLIDATION. 74,000 4,600 800 30,000 109,400 800 65,400 30,000 44,000 1. CALCULATION OF ACQUISITION DIFFERENTIAL Cost of goods sold Expenses 26,000 28,000 4,400 3,600 30,400 31,600 54,000 11,400 8,000 36,000 Total expenses Total Net income Less net income to NCI Net income to controlling inte 62,000 47,400 0 47.400 11,400 36,000 RETAINED EARNINGS STATEMENT Retained Earnings 1/1 9,500 5,000 14,500 Net income 11,400 36,000 47,400 Dividends declared 7,000 2,000 9,000 Retained Earnings 12/31 13,900 39,000 52,900 BALANCE SHEET cash accts rec Inventory Land Equipment, net Investment in S 5,500 7,000 10,000 50,000 24,000 20,400 33,000 4,000 4,500 3,500 9,000 38,500 11,000 14,500 53,500 33,000 20,400 o 0 0 170,900 Total assets 116,900 54,000 Accounts payable Common stock Retained earnings noncontrolling interest Total liabilities and equity 53,000 50,000 13,900 5,000 10,000 39,000 58,000 60,000 52,900 0 170,900 116,900 54,000 OO Push Corporation paid $16,200 for a 90% interest in Swish Corporation on January 1, 2019, when Swish stockholders' equity consisted of $10,000 Capital Stock and $3,000 of Retained Earnings. The excess cost over book value was attributable to goodwill. Assume proportional pricing for the NCI. Additional information: 1. Push sells merchandise to Swish at 120% of Push's cost. During 2019, Push's sales to Swish were $4,800, of which half of the merchandise remained in Swish's inventory at December 31, 2019 (The 2019 ending inventory was sold in 2020.) During 2020, Push's sales to Swish were $6,000 of which 60% remained in Swish's inventory at December 31, 2020. At year-end 2020, Swish owed Push $1,500 for the inventory purchased during 2020. 2. Push Corporation sold equipment with a book value of $2,000 and a remaining useful life of four years and no salvage value to Swish Corporation on January 1, 2020 for $2,800. Straight-line depreciation is used. 3. During 2020, Swish sold to Push land for $50,000 that had a book value of $20,000. Push still owns the land at 12/31/20. 4. Separate company financial statements for Push Corporation and Subsidiary at December 31, 2020 are summarized in the first two columns of the consolidation working papers. See Spreadsheet Tab. FOR ANY CALCULATION, DO NOT ROUND AMOUNTS Required: Carefully Follow and label each step ON THE SPREADSHEET TAB. Points 1. Prepare the acquisition analysis as of acquisition date. Compute the unamortized acquisition differential as of 1/1/2019. Goodwill is not considered impaired at 12/31/20. 10 2. Analyze each intercompany transaction. Label as either upstream or downstream. Determine amounts of profit that are unrealized and/or realized for 2020. 15 3. SEPARATELY calculate Net income to the controlling interest for the year 2020 20 4. Verify the calculation of the balance in the account equity in sub earnings and record the parent company entries with respect to its investment during 2020 20 5. Prepare all elimination/consolidation entries for 2020 20 6. Complete the consolidating spreadsheet for the year ended December 31, 2020. 15 TOTAL 100 S CONS. TOT. ELIMINATIONS Dr Cr 14,000 INCOME STATEMENT EYE 12/31120 Sales Equity in sub earnings gain on sale of equip Gain on sale of land Total revenues 60,000 4,600 DO ALL YOUR SUPPORTING WORK ON THIS WORKSHEET. DO NOT RECREATE CONSOLIDATION WORKPAPERS LABEL EACH ANSWER TO QUESTION DETAILS AND THEN INPUT RESPONSES ON THE RED TAB Do not change any pre-existing formulas on the consolidation spreadsheet. YOU MUST USE APPROPIATE FORMULAS INCLUDING CELL REFERENCES THAT DOCUMENT SUPPORTING WORK FOR CONSOLIDATION. 74,000 4,600 800 30,000 109,400 800 65,400 30,000 44,000 1. CALCULATION OF ACQUISITION DIFFERENTIAL Cost of goods sold Expenses 26,000 28,000 4,400 3,600 30,400 31,600 54,000 11,400 8,000 36,000 Total expenses Total Net income Less net income to NCI Net income to controlling inte 62,000 47,400 0 47.400 11,400 36,000 RETAINED EARNINGS STATEMENT Retained Earnings 1/1 9,500 5,000 14,500 Net income 11,400 36,000 47,400 Dividends declared 7,000 2,000 9,000 Retained Earnings 12/31 13,900 39,000 52,900 BALANCE SHEET cash accts rec Inventory Land Equipment, net Investment in S 5,500 7,000 10,000 50,000 24,000 20,400 33,000 4,000 4,500 3,500 9,000 38,500 11,000 14,500 53,500 33,000 20,400 o 0 0 170,900 Total assets 116,900 54,000 Accounts payable Common stock Retained earnings noncontrolling interest Total liabilities and equity 53,000 50,000 13,900 5,000 10,000 39,000 58,000 60,000 52,900 0 170,900 116,900 54,000 OO