S AFAWorksheet - Template - Protected... Saved to this PC v Search Ryan hohammed @ - o X File Home Insert Pagelayout Formulas Data Review View Automate Help 'l\\_} PROTECTED VIEW Be carefulfiles from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Editing X B173 v i f& Beingentryto reduce Depreciation Expense for the year by the difference between depreciation based on the book value and the intercompany sales price ~ A B C D E F G H 1 J K L M N o P Q R S a 1 Problem 5-8 2 11th Edition 3 | Common Information 4 Ownership Interest 5 Number of Market Price 6 Cash Shares per Share Total 7 Price Paid 3 3 1 0 8 9 Acquired Company's Balance Sheet Before Purchase Book Market 10 Book Value Market Value Life Value Value Life 11 Assets Liabilities 12 Accounts Receivable Accounts Payable 13 | Inventory Bonds Payable 14 |Land 15 Buildings (NBV) 16 Equipment (NBV) 17 18 Equity 19 Common Stock 20 Paid In Capital 21 Retained Earnings 22 23 Goodwill Total Liabilities 24 Total Assets 0 0 and Equity 0 0 25 Company Implied 26 Value Analysis Fair Value Parent Price NCI Value 27 |Price Paid #DIV/O! 0 #DIV/0! Fair Value of Net Assets 28 |Excluding Goodwil 0 0 20 Gondwill HOIOL n #NDN/m v Working Papers s P 4 > Ready 9% 7:41 PM File Home Insert 'l\\_} PROTECTED VIEW Be carefulfiles from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. B 25 26 27 28 29 30 3 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 Page Layout v AFA Worksheet - Template - Protected... Formulas, Saved to this PC v Data Review View Automate Help L Search 173 v i fx Being entry to reduce Depreciation Expense for the year by the difference between depreciation based on the book value and the intercompany sales price B C D E F G H Enable Editing Value Analysis Price Paid Fair Value of Net Assets Excluding Goodwil Goodwill Gain on Acquisition Company Implied Fair Value #DIV/O! #DIV/Ol NCI Value 0 #DIV/O! Parent Price 0 0 0 #DIV/0! Determination and Distribution of Excess Schedule Fair Value of Subsidiary Less Book Value of Interest Acquired Common Stock Paid in Excess Retained Earnings Total Equity Interest Acquired Book Value Excess of Cost over Book Value Accounts Adjusted Goodwill Total Company Value #DIV/O! #DIV/OL #DIV/Ol #DIV/OL Parent Price NCI 0 #DIv/ol 0 0 0% 100% 0 0 0 #DIV/0! 'Worksheet Distribution D1 Working Papers + J K L 741 PM 6/13/2024 o v AFA Worksheet - Template - Protected... Saved to this PC v ,o Search File Insert Formulas Data Review View Automate Home Page Layout Help 'l\\_} PROTECTED VIEW Be carefulfiles from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. B 50 1 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 173 v i fx A B & D E F G H Enable Editing Cost to Equity Conversion Subsidiary RE on Worksheet Subsidiary RE on Purchase Date Increase (Decrease) Ownership Interest % Adjustment to Investment Account Amortization Schedule Current Year Annual Account Adjusted Life Amount Prior Years (1) Total Key Inventory Accounts Subject to Amortization:- Buildings 0 0 0 A1 Equipment 0 0 0 A2 Total Amortizations 0 0 0 0 A3 Intercompany fixed asset profit deferral Parent Sub Original profit Year of sale Realized in prior years Balance, start of year 0 Realized in current year Intercompany Inventory Profit Deferral Subsidiarv Working Papers + Parent Parent Parent Subsidiary Subsidiary J Being entry to reduce Depreciation Expense for the year by the difference between depreciation based on the book value and the intercompany sales price K L M N o P Q R 741 PM 6/13/2024 o S AFAWorksheet - Template - Protected... Saved to this PC v Search Ryan hohammed @ - o X File Home Insert Pagelayout Formulas Data Review View Automate Help o i) PROTECTED VIEW Be carefulfiles from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Editing X B173 v i f& Beingentryto reduce Depreciation Expense for the year by the difference between depreciation based on the book value and the intercompany sales price ~ A B C D E F G H 1 J K L M N o P Q R S a 76 Realized in current year 77 78 |Intercompany Inventory Profit Deferral 79 Subsidiary Parent Parent Parent Subsidiary Subsidiary 80 Amount % Profit Amount % Profit 81 |Beginning 0% 0% 82 |Ending 0% 0% 83 84 |Proof for Bond Elimination (Calculation of Gain):- 85 |Gain remaining at year-end:- 86 Carrying value at 12/31/x6 87 Investment in bonds at 12/31/06 0 88 89 |Gain amortized during the year:- 90 |Interest revenue eliminated 91 |Interest expense eliminated 0 92 |Gain at January 1, 20x6 Q 93 94 |Income distribution schedules: 95 | Subsidiary: DR CR 96 | Internally generated net income 0 97 |Interest Adjustment 98 Realized Gain on Equipment 99 |Adjusted Income 100 NCI share 101 Controlling share 102 103 Parent 104 Internally generated net income 105 Controlling share of subsidiary 0 Unrealized Profit in Ending 106/ Inventory 107 Total 0 o o|o|o o Working Papers + - ] > 7:41 PM X AutoSave Off AFA Worksheet - Template - Protected... . Saved to this PC v Search Ryan Mohammed RM X File Home Insert Page Layout Formulas Data Review View Automate Help Comments Share PROTECTED VIEW Be careful-files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Editing X B173 vi X V fx Being entry to reduce Depreciation Expense for the year by the difference between depreciation based on the book value and the intercompany sales price. A B C D E G H K M N P Q R S 109 110 Consolidated Worksheet 111 Trial Balance Eliminations Consol NCI Control. Consol. 112 Princess Sundown Key Dr Key Cr Net Inc. R.E Bal. Sht. 113 Inventory EI 0 0 114 Equipment F1S 0 0 115 Accumulated Depreciation F1S 0 116 F2S 0 0 11/ Investment in Subsidiary CV O EL 118 D 0 0 9 Investment in Subsidiary Bonds B1 0 120 Goodwill D #DIV/O! #DIV/O! 121 Bonds Payable B1 0 0 122 Discount on Bonds Payable B1 0 0 123 Common Stock--Princess 0 124 Paid in Capital in Excess of Par--Princess 125 Retained Earnings--Princess F1S 0 CV 0 126 B1 0 0 127 Common Stock - Sundown EL 0 128 Paid in Capital in Excess of Par--Sundown EL 0 0 129 Retained Earnings--Sundown EL 0 B1 0 130 F1S O NC #DIV/O! #DIV/O! 131 Sales IS 0 0 132 Cost of Goods Sold EI 0 IS 0 0 133 Interest Income B1 0 0 134 Other Expenses F2S 0 0 135 Interest Expense B1 0 136 Totals 0 0 #DIV/O! #DIV/O! 137 Consolidated net income 0 138 NCI share O 0 139 Controlling share 0 0 140 NCI #DIV/O! #DIV/O! 141 Controlling retained earnings 0 Working Papers + Ready + 100% Q Search T myhp 0 ENG 7:42 PM 6/13/2024S AFAWorksheet - Template - Protected... Saved to this PC v Search Ryan hohammed @ - o X File Home Insert Pagelayout Formulas Data Review View Automate Help o i) PROTECTED VIEW Be carefulfiles from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Editing X B173 v i f& Beingentryto reduce Depreciation Expense for the year by the difference between depreciation based on the book value and the intercompany sales price ~ A B C D E F G H 1 J K L M N o P Q R S a 141 Controlling retained earnings 0 0 142 Totals #DIV/0! 143 144 Eliminations and Adjustments: 145 Adjustment 1 :- Conversion Debit Investment in Sundown 0 146 (CV) Credit Retained Earnings - Princess (January 1, 20X6) ) 147 Being entry to convert investment fo simple equity method as of January 1, 20X6 148 149 Adjustment 2 :- Current Year 2 150 (CY2) 191 None necessary as there no dividends declared by the Subsidiary 152 153 Adjustment 3 :- Elimination Debit Commen Stock - Sundown 0 154/ (EL) Debit Paid In Capital In Excess of Par - Sundown 0 155 Debit Retained Earnings - Sundown 0 156 Credit Investment in Sundown 0 157 Being entry to eliminate the investment in the subsidiary against the subsidiary's equity accounts 158 159 Adjustment 4 :- Distribution Debit Goodwill #DIV/0! 160 (D) Credit Investment in Sundown o 161 Credit Retained Earnings - Sundown #DIV/O! 162 Being entry to distribute excess and adjust NCI 163 164 Adjustment 5 :- Fixed Assets Debit Retained Earnings - Princess 0 3 165 (F18) Debit Retained Earnings - Sundown 0 166 Debit Accumulated Depreciation - Equipment 0 167 Credit Equipment 0 168 Being entry to eliminate prior-year intercompany gain less realized gain, adjust the asset and the Accumulated 169 Depreciation ( this being two years subsequent to the sale ) 170 171 Adjustment 6 :- Fixed Assets Debit Accumulated Depreciation - Equipment 0 3 172 (F2S) Credit Depreciation Expense 0 173 Being entry to reduce Depreciation Expense for the year by the difference between depreciation based on the 174 book value and the intercompany sales price. 1 v Working Papers P 4 > 7:42 PM S AFAWorksheet - Template - Protected... Saved to this PC v Search Ryan hohammed @ - o X File Home Insert Pagelayout Formulas Data Review View Automate Help o i) PROTECTED VIEW Be carefulfiles from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Editing X B173 v i f& Beingentryto reduce Depreciation Expense for the year by the difference between depreciation based on the book value and the intercompany sales price ~ A B C D E F G H 1 J K L M N o P Q R S a 166 Debit Accumulated Depreciation - Equipment 0 167 Credit Equipment 0 168 Being entry to eliminate prior-year intercompany gain less realized gain, adjust the asset and the Accumulated 169 Depreciation ( this being two years subsequent to the sale) 170 171 Adjustment 6 :- Fixed Assets Debit Accumulated Depreciation - Equipment 0 7 172 (F28) Credit Depreciation Expense 0 173 Being entry to reduce Depreciation Expense for the year by the difference between depreciation based on the 174 book value and the intercompany sales price. 1 175 176 177 178 Adjustment 7 :- Intercompany Debit Sales 179 (18) Credit Cost of Goods Sold o 180 Being entry to eliminate intercompany sales during the current period 181 182 Adjustment 8 :- Ending Inven' Debit Cost of Goods Sold 0 183 (EI) Credit Inventory o 184 Being entry to eliminate intercompany profit in Ending Inventory 185 186 Adjustment 9 :- Bonds Debit Bonds Payable 0 187 (B1) Debit Interest Income 0 188 Credit Investment in Subsidiary Bonds 0 189 Credit Discount on Bonds Payable o 190 Credit Interest Expense 0 191 Credit Retained Earnings - Princess 0" 192 Credit Retained Earnings - Sundown 0 193 Being entry to eliminate balance in Investment in Bonds against Bonds Payable, eliminate intercompany 194 interest revenue and expense and record gain on retirement of Bonds 195 196 Adjustment 10 :- Bonds 197 (B2) 198 None necessary as there no Intercompany Accrued Interest 199 Working Papers s P 4 > 7:42 PM ' D | Q W & M D A K C Q h| Q c G c Q g M In| + A Q W Q W D E & C Q g| M Ir|+ A + C S C O M * H Q ha h Q h Q B Q D AH+ CA x + X C @ https://myelearning.sta.uwi.edu/pluginfile.php/2467631/mod_resource/content/18/ACCT%203041%20AFA%20Course%20Outline%20%28Summer%202023-2024%2... . . . Draw Q| |A | at | Ask Copilot + 13 of 16 | | 09 Edit with Acrobat ACCT 3041 - ADVANCED FINANCIAL ACCOUNTING Summer Semester 2023-2024 Group Project #1 - 15% On January 1, 2022, Platini Company acquired 80% of the common stock of Maldini Company for $560,000. On this date, Maldini had total owners' equity of $540,000, including retained earnings of $240,000. During 2022, Maldini had net income of $60,000 and paid no dividends. O Any excess of cost over book value is attributable to land, undervalued $10,000, and goodwill. On January 1, 2023, Platini held merchandise acquired from Maldini for $10,000. During 2023, Maldini sold merchandise to Platini for $100,000, of which $20,000 was held by Platini on December 31, 2023. Maldini's usual gross profit on affiliated sales is 40%. On December 31, 2023, Platini still owes Maldini $20,000 for merchandise acquired in December. + On January 1, 2023, Platini sold to Maldini some equipment with a cost of $50,000 and a book value of $20,000. The sales price was $40,000. Maldini is depreciating the equipment over a five-year life, assuming no salvage value and using the straight-line method. As at December 31, 2023, the trial balances of Platini and Maldini are provided on the next page. Required: Which method is being used by Platini to account for its investment in Maldini? Provide 2 reasons to justify your selection. ii) Prepare and complete the worksheet for consolidated financial statements for the year ended December 31, 2023. Prepare all supporting schedules. Round all computations to the nearest dollar. 1 28.C Q Search ENG ~ 4 0 7:57 PM 6/13/2024TO D | Q W & N D A K C Q h| Q c S c Q g M Ir| + A Q W Q W D E & C Q g| M Ir|+ A + C & C O N K H Q h => h Q h Q B Q D AH+ CAX + X C @ https://myelearning.sta.uwi.edu/pluginfile.php/2467631/mod_resource/content/18/ACCT%203041%20AFA%20Course%20Outline%20%28Summer%202023-2024%2... . . . Draw Q| | A |at | Ask Copilot + 14 of 16 2 | 09 Edit with Acrobat Trial Balances: Trial Balance as at December 31, 2023 Platini Maldini Account Titles $ $ Inventory, December 31 100,000 80,000 Other Current Assets 253,000 450,000 O Investment in Subsidiary 560,000 Other Long-Term Investments 50,000 30,000 Land 140,000 70,000 Buildings and Equipment 315,000 400,000 Accumulated Depreciation 208,000) (1 10,000) Other Intangibles 60,000 + Current Liabilities (150,000) (100,000) Bonds Payable (100,000) Premium on Bonds Payable 5,000) Other Long-Term Liabilities (200,000) (150,000) Common Stock (200,000) (100,000) Other Paid-in Capital 100,000) (200,000) Retained Earnings (421,000) (300,000) Net Sales (600,000) (380,000) Cost of Goods Sold 350,000 180,000 Operating Expenses 140,000 100,000 Dividend Income (24,000) Gain on Sale of Equipment (20,000) Dividends Declared 60,000 30,000 TOTALS 0 1 28.C Q Search Ti ENG ~ 4 0 7:57 PM 6/13/2024