Seashore Company?s outstanding common stock on January 1, for $650,000 in cash. Seashore reported net assets with a carrying amount of $380,000 at that time. Some of Seashore?s assets either were unrecorded (having been internally developed) or had fair values that differed from book values as you see below.Any goodwill is considered to have an indefinite life with no impairment charges during the year.Seashore declared and paid dividends in the same period. Credit balances are indicated by parentheses.

shore Company?s outstanding common stock on January 1, for $650,000 in cash. Seashore reported net assets with a carrying amount of $380,000 at that time. Some of Seashore?s assets either were unrecorded (having been internally developed) or had fair values that differed from book values as you see below.Any goodwill is considered to have an indefinite life with no impairment charges during the year.Seashore declared and paid dividends in the same period. Credit balances are indicated by parentheses.

Refer to worksheet(Do not use commas between numbers. Enter number ex. 325000)

S - Eliminate Stockholder's Equity

Beginning Retained Earnings

(1)

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A - Allocation of Seashore?s acquisition-date excess fair values over book values.

Software Cost Assigned in Excess of book

(2)

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A - Allocation of Seashore?s acquisition-date excess fair values over book values.

Customer Database Cost Assigned in Excess of book

(3)

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A - Allocation of Seashore?s acquisition-date excess fair values over book values.

Equipment Cost Assigned in Excess of book

(4)

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E - Recognition of current year excess fair-value amortization and depreciation expenses

SoftwareAnnual amortization/depreciation

(5)

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E - Recognition of current year excess fair-value amortization and depreciation expenses

Customer Database Annual amortization/depreciation

(6)

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E - Recognition of current year excess fair-value amortization and depreciation expenses

Equipment Annual amortization/depreciation

(7)

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I -Eliminate intra-entity Income

Equity in subsidiary earnings

(8)

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I -Eliminate intra-entity Income

Investment in SEASHORE

(9)

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D - Eliminate intra-entity Dividend

Investment in SEASHORE

(10)

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D - Eliminate intra-entity Dividend

Dividends paid

(11)

PACIFIC and SEASHORE Seashore Company's outstanding common stock on January 1, for $650,000 in cash. Seashore reported ne carrying amount of $380,000 at that time. Some of Seashore's assets either were unrecorded (having bee developed) or had fair values that differed from book values as you see below. Any goodwill is considere indefinite life with no impairment charges during the year. Seashore declared and paid dividends in the s balances are indicated by parentheses. Refer to this worksheet for #1-11. Following are financial statements at the end of the first year for these prepared from their separately maintained accounting systems. Below you will see the 5 types of eliminat entries that need to occur in the consolidated worksheet. Fill in the fields in the D2L quiz fields for the co #1-11. PACIFIC COMPANY AND CONSOLIDATED SUBSIDIARY Consolidation Worksheet For Year Ending December 31 Accounts Revenues Cost of goods sold Depreciation expense Amortization expense Equity in subsidiary earnings Net income PACIFIC SEASHORE $ (1,200,000) $ (420,000) 300,000 130,000 75,000 70,000 25,000 (198,000) $ (998,000) $ (220,000) Retained earnings, 1/1 Net income Dividends paid Retained earnings, 12/31 $ Cash Receivables Inventory Investment in Seashore $ SW Customer Database Equipment (net) Goodwill Total assets Liabilities Common stock Retained earnings Total liabilities and equity (700,000) $ (998,000) 200,000 $ (1,498,000) $ 216,000 $ 235,000 150,000 788,000 (280,000) (220,000) 60,000 (440,000) 133,000 56,000 135,000 - 474,000 925,000 2,788,000 $ 60,000 270,000 654,000 (790,000) $ (500,000) (1,498,000) $ (2,788,000) $ (114,000) (100,000) (440,000) (654,000) $ $ Consolidation Entries Debit (8) [E] [I] 26,000 198,000 (1) [S] 280,000 (11) (10) (5) (6) (4) Parentheses indicate a credit balance. What is the elimination of Stockholder's Equity entry? Use to fill in #1 S - Eliminate Stockholder's Equity First eliminating entry to calculate is the eliminatation of the subsidiary equity. Seashore's Equity accounts [D] 60,000 [A] [A] [E] [A] (9) 40,000 (2) 80,000 (3) 4,000 (7) 190,000 [S] 100,000 978,000 Beginning Retained Earnings Common Stock Reduce Investment in Seashore 280000 $100,000 $380,000 What is the allocated of assets with excess fair values over book values? Use to fill in #2,3,4 A - Allocation of Seashore's acquisition-date excess fair values over book values. The (3) subsidiary assets that have new values with the acquisition are shown below. Calculate the excess value and enter on the consolidation worksheet the allocation of the new values. Book Fair Cost Assigned in Values Values Remaining Useful Life Excess of book Software $ 50,000 $ 100,000 $ 50,000 5 (2) Customer Database 80,000 $ 80,000 5 (3) Equipment 280,000 240,000 $ (40,000) 10 (4) $ 90,000 What is the allocated of assets with excess fair values over book values? Use to fill in #5,6,7 E - Recognition of current year excess fair-value amortization and depreciation expenses The (3) assets that have new values with the acquisition are shown below. Calculate both the annual amoritization of the assets with fair values in excess of book and excess depreciation for the o Software Customer Database Equipment $ Book Values 50,000 280,000 Fair Values $ 100,000 80,000 240,000 Remaining Useful Life 5 5 10 What is the elimination of intra-entity income entry? Use to fill in #8,9 I -Eliminate intra-entity Income Because Pacific is using the equity method for accounting for the investment in Seashore, intra-entity income, intra-entit dr cr Equity in subsidiary earnings (8) Investment in SEASHORE (9) What is the elimination of intra-entity dividends paid/received entry? Use to fill in #10,11 D - Eliminate intra-entity Dividend Because Pacific is using the equity method for accounting for the investment in Seashore, intra-entity income, intra-entit dr cr Investment in SEASHORE (10) Dividends paid (11) S A I D E P C* A1 A2 TI G *G TA ED *TA TL *TL B B* Eliminate Stockholder's Equity Allocate sub's excess FV over book attributable to Assets, unamoritzed as of beginning Eliminate intra-entity Income Eliminate intra-entity Dividend Recognition of amortz Expense Eliminate intra-entity paybable/receivable Convert retained earnings to accrual basis, recording parent's share Allocate sub's excess FV over book attributable to Assets, unamoritzed as of beginning Allocate goodwill to parent and non-controlling interest Eliminate of intra-entity inventory transfer, sales/purchases Defer unrealized intra-entity gross from ending year Removal of unrealized gross profit from beginning RE from following year Eliminate intra-entity transfer of asset (equipment) Eliminate of excess depreciation from intra-entity gain on transfer of equipment Removal of balances of unrealized gain of intra-entity transfer of assets (equipment) an Eliminate intra-entity transfer of land Removal of balances of unrealized gain of intra-entity transfer of land in Retained earn Eliminate intra-entity bonds and related interest acount and to recognize loss on effect Removal intra-entity bonds and related interest acount and to recognize loss on effecti h. Seashore reported net assets with a unrecorded (having been internally y goodwill is considered to have an paid dividends in the same period. Credit the first year for these two companies the 5 types of eliminating/adjusting 2L quiz fields for the corresponding figures DIARY solidation Entries [E] [D] Consolidated Totals (1,620,000) 430,000 4,000 141,000 51,000 (998,000) Credit 60,000 (700,000) (1,218,000) 200,000 (1,718,000) 349,000 291,000 285,000 [S] [A] [I] [E] [E] [A] 380,000 270,000 198,000 10,000 16,000 40,000 978,000 564,000 64,000 1,159,000 190,000 2,902,000 (904,000) (500,000) (1,938,000) (3,342,000) Assigned in ss of book (2) (3) (4) 10000 16000 -4000 22000 cess depreciation for the overvalued Seashore asset. Annual amortization/depreciation (5) (6) (7) a-entity income, intra-entity divdends, and accruals need to be eliminated a-entity income, intra-entity divdends, and accruals need to be eliminated namoritzed as of beginning of year namoritzed as of beginning of year ollowing year nsfer of equipment r of assets (equipment) and balance of accumulated depreciation in Retained earnings in following year r of land in Retained earnings in following year o recognize loss on effective retirement o recognize loss on effective retirement