Using the data in the Spreadsheet at the bottom of the post, perform the accounting required for the acquisition of Little, Inc. by Big, Inc. Within the worksheet, you are to:

1. Select an accounting method (either cost or equity) and explain why you selected this method

2. Perform the required journal entries

3. Complete the consolidation worksheet

4. Prepare the consolidated balance sheet in good form

Assume that Big Company decides to Calculation of fair acquire 100% of Little Company for value of the net $200,000. Prepare the consolidated assets of Little balance sheet and any supporting Company Big Company Balance Sheet Assets, Liabilities & Equities Book Value Cash $500,000 $10,000 AR $50,000 Inventory $40,000 Land $400,000 PP&E Accumulated Depreciation $150,000 Patent $850,000 Total Assets $110,000 AP $395,000 Common Stock $300,000 Additional Paid in Capital Retained Earnings $45,000 Total Liabilities & Equity $850,000 Little Company Balance Sheet Assets, Liabilities & Equities Book Value $35,000 Cash $10,000 AR $65,000 inventory Land $40,000 $40,000 PP&E $5,000 Accumulated Depreciation Patent Total Assets $185,000 $25,000 AP $25,000 Common Stock Additional aid In Capital $35,000 Retained Earnings $100,000 Total Liabilities & Equity $185,000 Journal Entry for Acquisition Assume that Big Company decides to acquire 100% of Little Prepare the Consolidated Bala Company for $200,000. Prepare the consolidated balance sheet in the area below and any supporting worksheets Big Company Balance Shee Big Company Worksheet Assets, Liabilities & Equities Assets, Liabilities & Equities Cash Cash AR nventory nventory Land and PP&E PP&E Accumulated Depreciation Accum ulated Depreciation Goodw Patent Patent Total Assets Total Assets AP Common Stock Common Stock Additional Paid in Capital Additional Paid in Capital Retained Earnings Retained Earnings Total Liabilities & Equity Total Liabilities & Equity