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REQ C Prepare Entry S to eliminate the beginning stockholders' equity of the subsidiary. Prepare Entry A to recognize the unamortized allocation balances as of
REQ C
Prepare Entry S to eliminate the beginning stockholders' equity of the subsidiary.
Prepare Entry A to recognize the unamortized allocation balances as of the beginning of the current year.
Prepare Entry I to remove the equity income recognized during the year - equity method.
Prepare Entry D to remove the Intra-entity dividend declarations.
Prepare Entry E to recognize the excess acquisition-date fair-value amortizations for the period.
The following are selected accounts and balances for Mergaronite Company and Hill, Inc., as of December 31, 2021. Several of Mergaronite's accounts have been omitted. Credit balances are indicated by parentheses. Dividends were declared and paid in the same period. Revenues Cost of goods sold Depreciation expense Investment income Retained earnings, 1/1/21 Dividends declared Current assets Land Buildings (net) Equipment (net) Liabilities Common stock Additional paid-in capital Mergarnite $ (586, 000) 272,000 108,000 NA (898, 000) 120,000 220,000 308,000 508,000 218,000 (386, 000) (290,000) (60,000) Hill $ (252, 000) 92,000 42,000 NA (600,000) 42,000 694,000 100,000 152,000 246,000 (310, 000) (38,000) (914, 000) Assume that Mergaronite acquired Hill on January 1, 2017, by issuing 7,200 shares of common stock having a par value of $10 per share but a fair value of $100 each. On January 1, 2017, Hill's land was undervalued by $21,200, its buildings were overvalued by $31,600, and equipment was undervalued by $58,200. The buildings had a 10-year remaining life; the equipment had a 5-year remaining life. A customer list with an appraised value of $106,000 was developed internally by Hill and was estimated to have a 20- year remaining useful life. a. Determine the December 31, 2021, consolidated totals for the following accounts: b. In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for the subsidiary? c. If the parent uses the equity method, what consolidation entries would be used on a 2021 worksheet? Required A Required B Required c Determine the December 31, 2021, consolidated totals for the following accounts: (Input all amounts as positive values.) Consolidated Totals Revenues Cost of goods sold Depreciation expense Amortization expense Buildings Equipment Customer list Common stock Additional paid-in capital Required A Required B Required C In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for the subsidiary? Consolidated totalsStep by Step Solution
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