Accounting & MIS 4200 · Accounting & MIS 4200 . Homework Less-than-100% Acquired Subsidiaries ....

Accounting & MIS 4200 Homework Less-than-100% Acquired Subsidiaries PROBLEM I Parent purchased 75% of Sub on 1/1/20x1. The worksheet in part A below was prepared immediately after purchase. Additionally, the following is known about the fair values of Sub’s accounts on that date:

After Acquisition 1/1/x1Remaining

LifeSub's Fair

ValueCash 1,400$ Inventory FIFO 600 Property, P & E (net) 15 years 5,800 Land indefinite 980 Patents 4 years 420 Current Liabilities (900) Long-Term Debt 5 years (1,000)

Parent paid $6,800 to acquire 75% of Sub. The remaining 25% had a fair market value of $2,200. The Sub had three unrecorded assets/liabilities (other than possible goodwill) at the acquisition date: Jingles (indefinite life) worth $400, Customer Contracts already completed (6-year life) worth $300, and Contracts Under Negotiation worth $90. The Jingles had a fair value of $340 on 12/31/x1 and $420 on 12/31/x2. Goodwill (if any) lost no value in 20x1, but lost 20% of its value in 20x2. Parent uses the equity method.

AMIS 4200 Chapters 3 & 5 Homework

David E. Wallin of 29 Copyright 2014 2105 All rights reserved

PROBLEM I (continued) Part A. REQUIRED: Complete the worksheet, preparing the consolidated statement. 1 Jan 20x1 Parent Sub Adjustments ConsolidatedCash 550 1,400 Inventory 800 650 Property, P & E (net) 3,200 5,200 Land 800 750 Patents 500 Investment in S 6,800

JinglesCustomer ContractsGoodwillCurrent Liabilities 750 900 Long-Term Debt 3,200 1,200 NCI in Net Assets

Common Stock 100 50 Ret. Earnings, end 8,100 6,350

12,150 12,150 8,500 8,500



PROBLEM I (continued) Part B. REQUIRED: Complete the 20x1 worksheet, preparing the consolidated statement. 31 Dec 20x1 Parent Sub Adjustments ConsolidatedSales 7,000 3,400 Cost of Sales 4,000 1,700 Oper. Expenses 2,000 1,100 Jingles Impairment LossEquity in S Income 360 Consolidated Net Inc. 1,360 600 NCI in Net IncomeNet Income/Loss Parent 1,360 600

Ret. Earnings, beg. 8,100 6,350 Net Income/Loss 1,360 600 Dividends Declared 500 400

Ret. Earnings, end 8,960 6,550

Cash 2,650 2,285 Inventory 700 390 Property, P & E (net) 3,000 4,850 Land 800 750 Patents 375 Investment in S 6,860



14,010 14,010 8,650 8,650



PROBLEM I (continued) Part C. REQUIRED: Complete the 20x2 worksheet, preparing the consolidated statement. 31 Dec 20x2 Parent Sub Adjustments ConsolidatedSales 8,000 3,700 Cost of Sales 4,500 1,900 Oper. Expenses 2,400 1,500 Goodwill Impairment LossEquity in S Income 18 Consolidated Net Inc. 1,082 300 NCI in Net IncomeNet Income/Loss Parent 1,082 300






14,542 14,542 8,825 8,825



PROBLEM I (continued) Part D. Assume Sub had used LIFO. REQUIRED: Complete the 20x1 worksheet, preparing the consolidated statement. There may sound rounding issues! 31 Dec 20x1 Parent Sub Adjustments ConsolidatedSales 7,000 3,400 Cost of Sales 4,000 1,700 Oper. Expenses 2,000 1,100 Jingles Impairment LossEquity in S Income 338 Consolidated Net Inc. 1,338 600 NCI in Net IncomeNet Income/Loss Parent 1,338 600






13,988 13,988 8,650 8,650



PROBLEM I (continued) Part E. Assume Sub had used LIFO. REQUIRED: Complete the 20x1 worksheet, preparing the consolidated statement. There may sound rounding issues! 31 Dec 20x2 Parent Sub Adjustments ConsolidatedSales 8,000 3,700 Cost of Sales 4,500 1,900 Oper. Expenses 2,400 1,500 Jingles Impairment LossEquity in S Income 18 Consolidated Net Inc. 1,083 300 NCI in Net IncomeNet Income/Loss Parent 1,083 300






14,521 14,521 8,825 8,825



PROBLEM II Parent purchased 80% of Sub on 1/1/20x1 for $4,600 cash. The remaining 20% had a fair value of $1,300. Sub had three unrecorded assets/liabilities on that date other than (possible) goodwill. The Sub had a 6-year Order Backlog worth $120, Assembled Workforce of $75, and an “unfavorable lease.” Sub had negotiated a lease a number of years ago at the then market values. However, there are paying more on that lease, which they cannot cancel, than they would for a lease negotiated today. The present value of the extra payments over the remaining 4 years of the lease is $180. The schedule below represents the fair values immediately prior to purchase:


LifeSub's Fair

ValueCash 1,460$ Inventory LIFO 900 Property, P & E (net) 20 years 3,200 Land indefinite 800 Copyrights 7 years 750 Current Liabilities (500) Long-Term Debt 10 years (1,250)

Sub uses LIFO. Goodwill lost 10% of its original value in 20x1 and 25% of its original value in 20x2. Parent uses the equity method.



PROBLEM II (continued) Part A. REQUIRED: Complete the worksheet, preparing the consolidated statement on the date of acquisition (1/1/20x1). 1 Jan 20x1 Parent Sub Adjustments ConsolidatedCash 1,330 1,460 Inventory 400 800 Property, P & E (net) 4,500 3,700 Land 1,200 860 Copyrights 400 Investment in S 4,600

Order BacklogGoodwillCurrent Liabilities 650 500 Lease ObligationLong-Term Debt 4,100 1,100 NCI in Net Assets


12,030 12,030 7,220 7,220



PROBLEM II (continued) Part B. REQUIRED: Complete the worksheet, preparing the consolidated statement for 20x1. 31 Dec 20x1 Parent Sub Adjustments ConsolidatedSales 1,500 4,000 Cost of Sales 500 2,400 Oper. Expenses 800 1,450 Goodwill Impairment LossEquity in S Income 96 Consolidated Net Inc. 296 150 NCI in Net IncomeNet Income/Loss Parent 296 150

Ret. Earnings, beg. 7,200 5,600 Net Income/Loss 296 150 Dividends Declared 100 50


Cash 1,620 1,617 Inventory 300 1,000 Property, P & E (net) 4,200 3,550 Land 1,200 860 Copyrights 343 Investment in S 4,656



11,976 11,976 7,370 7,370



PROBLEM II (continued) Part C. REQUIRED: Complete the 20x2 worksheet, preparing the consolidated statement. 31 Dec 20x2 Parent Sub Adjustments ConsolidatedSales 1,600 4,200 Cost of Sales 540 2,500 Oper. Expenses 840 1,500 Goodwill Impairment LossEquity in S Income 62 Consolidated Net Inc. 282 200 NCI in Net IncomeNet Income/Loss Parent 282 200

Ret. Earnings, beg. 7,396 5,700 Net Income/Loss 282 200 Dividends Declared 100 60


Cash 2,448 2,334 Inventory 340 600 Property, P & E (net) 4,000 3,400 Land 1,000 860 Copyrights 286 Investment in S 4,670



12,458 12,458 7,480 7,480



PROBLEM III Parent purchased 60% of Sub on 1/1/20x1 for $2,551. The remaining 40% was worth $1,600 at acquisition. The Sub had three unrecorded assets/liabilities: a Franchise arrangement that expires in 5 years from now worth $90, Contracts under Negotiation worth $12, and Trademarks worth $55. The following is known:


LifeSub's Fair

ValueCash 910$ Inventory w/a 730 Property, P & E (net) 15 years 2,400 Land indefinite 650 Current Liabilities (200) Long-Term Debt 6 years (840)

Parent uses the equity method. Sub uses the weighted-average method for inventory.



PROBLEM III (continued) Part A. REQUIRED: Complete the date-of-acquisition worksheet, preparing the consolidated statement. 1 Jan 20x1 Parent Sub Adjustments ConsolidatedCash 389 910 Inventory 600 Property, P & E (net) 3,500 2,100 Land 2,000 500 Investment in S 2,551

FranchiseTrademarksGoodwillCurrent Liabilities 400 200 Long-Term Debt 900 NCI in Net Assets


8,440 8,440 4,110 4,110



PROBLEM III (continued) Part B. Below are the results of the 20x1. Goodwill (if any) lost half its value. The Trademarks were worth $33. REQUIRED: Complete the 20x1 worksheet, preparing the consolidated statement. 31 Dec 20x1 Parent Sub Adjustments ConsolidatedSales 7,000 8,000 Cost of Sales 2,000 Oper. Expenses 4,000 5,400 Goodwill Impairment LossEquity in S Income 121 Consolidated Net Inc. 3,121 600 NCI in Net IncomeNet Income/Loss Parent 3,121 600

Ret. Earnings, beg. 8,000 3,000 Net Income/Loss 3,121 600 Dividends Declared 1,000 250


Cash 3,089 1,260 Inventory 600 Property, P & E (net) 3,250 2,100 Land 2,000 500 Investment in S 2,522

FranchiseTrademarksGoodwillCurrent Liabilities 700 200 Long-Term Debt 900 NCI in Net Assets


10,861 10,861 4,460 4,460



Answers: Problem I

Acquisition:Acquisition Cost 6,800$ Fair value of NCI 2,200 Total Fair Value 9,000 Book value of Sub 6,400 Fair value in excess of book 2,600

Writeup/downs & Additions: Fair Value Book ValueIncr (Decr) in net assets

Cash 1,400$ 1,400 -$ Inventory 600 650 (50) Property, P & E (net) 5,800 5,200 600 Land 980 750 230 Patents 420 500 (80) Current Liabilities (900) (900) - Long-Term Debt (1,000) (1,200) 200 Jingles 400 400 Customer Contracts 300 300 1,600

Total goodwill 1,000$

Goodwill to CI: Acquisition price 6,800$ Less CI share 6,000 CI goodwill 800$ 80.0%

Goodwill to NCI: Total goodwill 1,000$ Less: CI goodwill 800 NCI goodwill 200$ 20.0%

Acquisition:NCI at acquisition:Book value of Sub 6,400$ Writeup/downs & Additions: 1,600

8,000 X 25%

2,000 NCI goodwill 200 NCI in Net Assets 2,200$



Subsequent:Subsequent Year Amortizations (not incl. GW, if any)

Writeup/downs & Additions: Amount Life Year 1 Year 2Inventory (50)$ FIFO 50$ -$ Property, P & E (net) 600 15 (40) (40)

Land 230 indef. - - Patents (80) 4 20 20 Long-Term Debt 200 5 (40) (40) Jingles 400 imp. (60) - Customer Contracts 300 6 (50) (50)

Non-GW amortizations 1,600$ (120)$ (110)$

Adjustments Split: Non-GW 100.0% 75.0% 25.0% Goodwill 100.0% 80.0% 20.0%

20x1: Total CI NCIReported Net Inc. 600$ 450$ 150$ Non-GW (120) (90) (30) Goodwill - - - Share of NI 480$ 360$ 120$

20x2: Total CI NCIReported Net Inc. 300$ 225$ 75$ Non-GW (110) (83) (28) Goodwill (200) (160) (40) Share of NI (10)$ (18)$ 8$



1 Jan 20x1 Parent Sub Adjustments ConsolidatedCash 550 1,400 1,950 Inventory 800 650 50 j 1,400 Property, P & E (net) 3,200 5,200 600 j 9,000 Land 800 750 230 j 1,780 Patents 500 80 j 420 Investment in S 6,800 6,800 j

Jingles 400 j 400 Customer Contracts 300 j 300 Goodwill 1,000 j 1,000 Current Liabilities 750 900 1,650 Long-Term Debt 3,200 1,200 200 j 4,200 NCI in Net Assets 2,200 j 2,200

Common Stock 100 50 50 j 100 Ret. Earnings, end 8,100 6,350 6,350 j - 8,100

12,150 12,150 8,500 8,500 9,130 9,130 16,250 16,250



31 Dec 20x1 Parent Sub Adjustments ConsolidatedSales 7,000 3,400 10,400 Cost of Sales 4,000 1,700 50 l 5,650 Oper. Expenses 2,000 1,100 130 m 20 n 3,210 Jingles Impairment Loss 60 o 60 Equity in S Income 360 360

Consolidated Net Inc. 1,360 600 550 70 1,480 NCI in Net Income 120 p 120 Net Income/Loss Parent 1,360 600 670 70 1,360

Ret. Earnings, beg. 8,100 6,350 6,350 j 8,100 Net Income/Loss 1,360 600 670 70 1,360 Dividends Declared 500 400 300 500

100 p

Ret. Earnings, end 8,960 6,550 7,020 470 8,960

Cash 2,650 2,285 4,935 Inventory 700 390 50 l 50 j 1,090 Property, P & E (net) 3,000 4,850 600 j 40 m 8,410 Land 800 750 230 j 1,780 Patents 375 20 n 80 j 315 Investment in S 6,860 6,800 j

60

Jingles 400 j 60 o 340 Customer Contracts 300 j 50 m 250 Goodwill 1,000 j 1,000 Current Liabilities 950 850 1,800 Long-Term Debt 4,000 1,200 200 j 40 m 5,040 NCI in Net Assets 2,200 j 2,220

20 p

Common Stock 100 50 50 j 100 Ret. Earnings, end 8,960 6,550 7,020 470 8,960

14,010 14,010 8,650 8,650 9,870 9,870 18,120 18,120 l Cost of Sales is $1,700 which is greater than (or equal to) the $650 (at Sub’s listed value) beginning inventory.



31 Dec 20x2 Parent Sub Adjustments ConsolidatedSales 8,000 3,700 11,700 Cost of Sales 4,500 1,900 6,400 Oper. Expenses 2,400 1,500 130 m 20 n 4,010 Goodwill Impairment Loss 200 p 200 Equity in S Income 18 18



50 p

Ret. Earnings, end 9,542 6,650 6,888 238 9,542

Cash 3,550 2,575 6,125 Inventory 800 550 1,350 Property, P & E (net) 2,700 4,700 560 j 40 m 7,920 Land 800 750 230 j 1,780 Patents 250 20 n 60 j 210 Investment in S 6,692 168 6,860 j

Jingles 340 j 340 Customer Contracts 250 j 50 m 200 Goodwill 1,000 j 200 o 800 Current Liabilities 900 925 1,825 Long-Term Debt 4,000 1,200 160 j 40 m 5,080 NCI in Net Assets 42 p 2,220 j 2,178


14,542 14,542 8,825 8,825 9,708 9,708 18,725 18,725



LIFO: Subsequent:Subsequent Year Amortizations (not incl. GW, if any)

Writeup/downs & Additions: Amount Life Year 1 Year 2Inventories (50)$ LIFO 20$ -$ Property, P & E (net) 600 15 (40) (40)

Land 230 indef. - - Patents (80) 4 20 20 Long-Term Debt 200 5 (40) (40) Jingles 400 imp. (60) - Customer Contracts 300 6 (50) (50)

Non-GW amortizations 1,600$ (150)$ (110)$


20x1: Total CI NCIReported Net Inc. 600$ 450$ 150$ Non-GW (150) (113) (38) Goodwill - - - Share of NI 450$ 338$ 113$

20x2: Total CI NCIReported Net Inc. 300$ 225$ 75$ Non-GW (110) (83) (28) Goodwill (200) (160) (40) Share of NI (10)$ (18)$ 8$



LIFO: 31 Dec 20x1 Parent Sub Adjustments ConsolidatedSales 7,000 3,400 10,400 Cost of Sales 4,000 1,700 20 l 5,680 Oper. Expenses 2,000 1,100 130 m 20 n 3,210 Jingles Impairment Loss 60 o 60 Equity in S Income 338 338



100 p

Ret. Earnings, end 8,938 6,550 6,990 440 8,938

Cash 2,650 2,285 4,935 Inventory 700 390 20 l 50 j 1,060 Property, P & E (net) 3,000 4,850 600 j 40 m 8,410 Land 800 750 230 j 1,780 Patents 375 20 n 80 j 315 Investment in S 6,838 6,800 j

38

Jingles 400 j 60 o 340 Customer Contracts 300 j 50 m 250 Goodwill 1,000 j 1,000 Current Liabilities 950 850 1,800 Long-Term Debt 4,000 1,200 200 j 40 m 5,040 NCI in Net Assets 2,200 j 2,213

13 p


13,988 13,988 8,650 8,650 9,810 9,810 18,090 18,090 l {($650−$390)/$650}×$50 = $20



LIFO: 31 Dec 20x2 Parent Sub Adjustments ConsolidatedSales 8,000 3,700 11,700 Cost of Sales 4,500 1,900 6,400 Oper. Expenses 2,400 1,500 130 m 20 n 4,010 Jingles Impairment Loss 200 p 200 Equity in S Income 18 18



50 p

Ret. Earnings, end 9,521 6,650 6,888 238 9,520

Cash 3,550 2,575 6,125 Inventory 800 550 30 j 1,320 Property, P & E (net) 2,700 4,700 560 j 40 m 7,920 Land 800 750 230 j 1,780 Patents 250 20 n 60 j 210 Investment in S 6,671 168 6,838 j 1

Jingles 340 j 340 Customer Contracts 250 j 50 m 200 Goodwill 1,000 j 200 o 800 Current Liabilities 900 925 1,825 Long-Term Debt 4,000 1,200 160 j 40 m 5,080 NCI in Net Assets 42 p 2,213 j 2,171


14,521 14,521 8,825 8,825 9,708 9,708 18,696 18,696 Inventory went up (from $390 to $550), so no additional write-off this period.



Answers: Problem II Acquisition:Acquisition Cost 4,600$ Fair value of NCI 1,300 Total Fair Value 5,900 Book value of Sub 5,620 Fair value in excess of book 280


Cash 1,460$ 1,460 -$ Inventory 900 800 100 Property, P & E (net) 3,200 3,700 (500) Land 800 860 (60) Copyrights 750 400 350 Current Liabilities (500) (500) - Long-Term Debt (1,250) (1,100) (150) Order Backlog 120 120 Lease Obligation (180) (180) (320)

Total goodwill 600$


Goodwill to NCI: Total goodwill 600$ Less: CI goodwill 360 NCI goodwill 240$ 40.0%

Acquisition:NCI at acquisition:Book value of Sub 5,620$ Writeup/downs & Additions: (320)

5,300 X 20%





Writeup/downs & Additions: Amount Life Year 1 Year 2Inventory 100$ LIFO -$ (25)$ Property, P & E (net) (500) 20 25 25

Land (60) indef. - - Copyrights 350 7 (50) (50) Long-Term Debt (150) 10 15 15 Order Backlog 120 6 (20) (20) Lease Obligation (180) 4 45 45

Non-GW amortizations (320)$ 15$ (10)$


20x1: Total CI NCIReported Net Inc. 150$ 120$ 30$ Non-GW 15 12 3 Goodwill (60) (36) (24) Share of NI 105$ 96$ 9$

20x2: Total CI NCIReported Net Inc. 200$ 160$ 40$ Non-GW (10) (8) (2) Goodwill (150) (90) (60) Share of NI 40$ 62$ (22)$



1 Jan 20x1 Parent Sub Adjustments ConsolidatedCash 1,330 1,460 2,790 Inventory 400 800 100 j 1,300 Property, P & E (net) 4,500 3,700 500 j 7,700 Land 1,200 860 60 j 2,000 Copyrights 400 350 j 750 Investment in S 4,600 4,600 j

Order Backlog 120 j 120 Goodwill 600 j 600 Current Liabilities 650 500 1,150 Lease Obligation 180 j 180 Long-Term Debt 4,100 1,100 150 j 5,350 NCI in Net Assets 1,300 j 1,300

Common Stock 80 20 20 j 80 Ret. Earnings, end 7,200 5,600 5,600 - 7,200

12,030 12,030 7,220 7,220 6,790 6,790 15,260 15,260



31 Dec 20x1 Parent Sub Adjustments ConsolidatedSales 1,500 4,000 5,500 Cost of Sales 500 2,400 2,900 Oper. Expenses 800 1,450 15 l 2,235 Goodwill Impairment Loss 60 m 60 Equity in S Income 96 96

Consolidated Net Inc. 296 150 156 15 305 NCI in Net Income 9 n 9 Net Income/Loss Parent 296 150 165 15 296

Ret. Earnings, beg. 7,200 5,600 5,600 j 7,200 Net Income/Loss 296 150 165 15 296 Dividends Declared 100 50 40 100

10 n

Ret. Earnings, end 7,396 5,700 5,765 65 7,396

Cash 1,620 1,617 3,237 Inventory 300 1,000 100 j 1,400 Property, P & E (net) 4,200 3,550 25 l 500 j 7,275 Land 1,200 860 60 j 2,000 Copyrights 343 350 j 50 l 643 Investment in S 4,656 4,600 j

56

Order Backlog 120 j 20 l 100 Goodwill 600 j 60 m 540 Current Liabilities 700 550 1,250 Lease Obligation 45 l 180 j 135 Long-Term Debt 3,800 1,100 15 l 150 j 5,035 NCI in Net Assets 1 n 1,300 j 1,299


11,976 11,976 7,370 7,370 7,041 7,041 15,195 15,195 Inventory went up (from $800 to $1,000), so no write-off.



31 Dec 20x2 Parent Sub Adjustments ConsolidatedSales 1,600 4,200 5,800 Cost of Sales 540 2,500 25 l 3,065 Oper. Expenses 840 1,500 15 m 2,325 Goodwill Impairment Loss 150 n 150 Equity in S Income 62 62

Consolidated Net Inc. 282 200 237 15 260 NCI in Net Income 22 o 22 Net Income/Loss Parent 282 200 237 37 282

Ret. Earnings, beg. 7,396 5,700 5,700 j 7,396 Net Income/Loss 282 200 237 37 282 Dividends Declared 100 60 48 100

12 o

Ret. Earnings, end 7,578 5,840 5,937 97 7,578

Cash 2,448 2,334 4,782 Inventory 340 600 100 j 25 l 1,015 Property, P & E (net) 4,000 3,400 25 m 475 j 6,950 Land 1,000 860 60 j 1,800 Copyrights 286 300 j 50 m 536 Investment in S 4,670 4,656 j

14

Order Backlog 100 j 20 m 80 Goodwill 540 j 150 n 390 Current Liabilities 500 520 1,020 Lease Obligation 45 m 135 j 90 Long-Term Debt 4,300 1,100 15 m 135 j 5,520 NCI in Net Assets 34 o 1,299 j 1,265


12,458 12,458 7,480 7,480 7,116 7,116 15,553 15,553 l {($800−$600)/$800}×$100 = $25



Answers: Problem III

Acquisition:Acquisition Cost 2,551$ Fair value of NCI 1,600 Total Fair Value 4,151 Book value of Sub 3,010 Fair value in excess of book 1,141


Cash 910$ 910 -$ Inventory 730 600 130 Property, P & E (net) 2,400 2,100 300 Land 650 500 150 Current Liabilities (200) (200) - Long-Term Debt (840) (900) 60 Franchise 90 90 Trademarks 55 55 785

Total goodwill 356$


Goodwill to NCI: Total goodwill 356$ Less: CI goodwill 274 NCI goodwill 82$ 23.0%

Acquisition:NCI at acquisition:Book value of Sub 3,010$ Writeup/downs & Additions: 785

3,795 X 40%





Writeup/downs & Additions: Amount Life Year 1Inventory 130$ w/a (100)$ Property, P & E (net) 300 15 (20)

Land 150 indef. - Long-Term Debt 60 6 (10) Franchise 90 5 (18) Lease Obligation 55 imp. (22)

Non-GW amortizations 785$ (170)$


20x1: Total CI NCIReported Net Inc. 600$ 360$ 240$ Non-GW (170) (102) (68) Goodwill (178) (137) (41) Share of NI 252$ 121$ 131$

1 Jan 20x1 Parent Sub Adjustments ConsolidatedCash 389 910 1,299 Inventory 600 130 j 730 Property, P & E (net) 3,500 2,100 300 j 5,900 Land 2,000 500 150 j 2,650 Investment in S 2,551 2,551 j

Franchise 90 j 90 Trademarks 55 j 55 Goodwill 356 j 356 Current Liabilities 400 200 600 Long-Term Debt 900 60 j 840 NCI in Net Assets 1,600 j 1,600

Common Stock 40 10 10 j 40 Ret. Earnings, end 8,000 3,000 3,000 - 8,000

8,440 8,440 4,110 4,110 4,151 4,151 11,080 11,080



31 Dec 20x1 Parent Sub Adjustments ConsolidatedSales 7,000 8,000 15,000 Cost of Sales 2,000 100 m 2,100 Oper. Expenses 4,000 5,400 70 n 9,470 Goodwill Impairment Loss 178 o 178 Equity in S Income 121 121

Consolidated Net Inc. 3,121 600 469 - 3,252 NCI in Net Income 131 l 131 Net Income/Loss Parent 3,121 600 600 - 3,121

Ret. Earnings, beg. 8,000 3,000 3,000 j 8,000 Net Income/Loss 3,121 600 600 - 3,121 Dividends Declared 1,000 250 150 1,000

100 l

Ret. Earnings, end 10,121 3,350 3,600 250 10,121

Cash 3,089 1,260 4,349 Inventory 600 130 j 100 m 630 Property, P & E (net) 3,250 2,100 300 j 20 n 5,630 Land 2,000 500 150 j 2,650 Investment in S 2,522 29 2,551 j

Franchise 90 j 18 n 72 Trademarks 55 j 22 n 33 Goodwill 356 j 178 o 178 Current Liabilities 700 200 900 Long-Term Debt 900 60 j 10 n 850 NCI in Net Assets 1,600 j 1,631

31 l


10,861 10,861 4,460 4,460 4,780 4,780 13,542 13,542 m {$2,000/($2,000+$600)}×$130 = $100. Note, the $600 represents the value of the ending inventory, not the beginning (though they are the same here). Of the $2,600 of goods available, $2,000 was sold.



Accounting & MIS 4200 · Accounting & MIS 4200 . Homework Less-than-100% Acquired Subsidiaries ....

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