Beruflich Dokumente
Kultur Dokumente
Class: McGraw-Hill/Irwin
Problem 04-32
850,000
(600,000)
250,000 Correct!
250,000
Correct!
$
$
$
25,000
100,000
10,000
Life
Excess
(years)
Amortizations
10 $
(2,500)
20
5,000
8
1,250
$
3,750
Correct!
Totals for the business combination for the year ending December 31, 2006
FATHER, INC. AND SAM CORPORATION
Revenues
Account Name
Balance
Explanation
$ 1,900,000 Add the two book values
Depreciation expense
267,500 Add the two book values less $2,500 excess adjustment
Amortization expense
10,000 Add the two book values plus $5,000 excess adjustment
Interest expense
50,250 Add the two book values plus $1,250 excess adjustment
Net income
Dividends paid
Current assets
Investment in Sam
Land
$ 1,119,500 Add the book values less the $25,000 allocation [asset was
overvalued] plus the excess amortization
Copyright
Total assets
$ 3,319,500
Accounts payable
Notes payable
581,250 Add the book values less $10,000 excess allocation plus
amortization
Common stock
$ 3,319,500
Accounts
Revenues
Cost of goods sold
Depreciation expense
Amortization expense
Interest expense
Equity in income of Sam
Separate company net income
Consolidated net income
NonFather,
Sam
Consolidation Entries
controlling Consolidated
Inc.
Corporation
Debit
Credit
Interest
Totals
(1,360,000)
(540,000)
(1,900,000)
700,000
385,000
1,085,000
260,000
10,000
[E]
2,500
267,500
5,000 [E]
5,000
10,000
44,000
5,000 [E]
1,250
50,250
(105,000)
- [ I ] 105,000
(461,000)
(135,000)
(487,250)
Land
Buildings and equipment (net)
Copyright
Total assets
Accounts payable
Notes payable
NCI in Sam 1/1
NCI in Sam 12/31
Common stock
Additional paid-in capital
Retained earnings, 12/31
Total liabilities and equity
Parentheses indicate a credit balance.
(26,250)
(1,265,000)
(461,000)
260,000
(1,466,000)
(440,000) [S]
(135,000)
65,000
(510,000)
965,000
733,000
528,000
-
292,000
877,000
2,867,000
60,000
265,000
95,000
948,000
(191,000)
(460,000)
(300,000)
(450,000)
(1,466,000)
(2,867,000)
440,000
[D]
52,000
[A]
[E]
[A]
165,000
2,500
100,000
(148,000)
(130,000) [A]
10,000
(100,000) [S]
(60,000) [S]
(510,000)
(948,000)
100,000
60,000
[D]
52,000
[S]
[I]
[A]
480,000
105,000
200,000
[A]
[E]
25,000
5,000
[E]
[S]
[A]
1,250
120,000
50,000
13,000
(170,000)
(183,250)
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
26,250
(461,000)
Correct!
Correct!
(1,265,000)
(461,000)
260,000
(1,466,000)
Correct!
Correct!
Correct!
Correct!
1,493,000
-
Correct!
Correct!
517,000
1,119,500
190,000
3,319,500
Correct!
Correct!
Correct!
Correct!
(339,000)
(581,250)
Correct!
Correct!
(183,250)
Correct!
(300,000)
(450,000)
(1,466,000)
(3,319,500)
Correct!
Correct!
Correct!
Correct!
80%
$
680,000
$
$
850,000
600,000
Land
Buildings and equipment
(10-year remaining life)
Copyright (20-year life)
Notes payable (due in 8 years)
Book
Value
$
60,000
275,000
Fair
Value
$ 225,000
250,000
100,000
(130,000)
200,000
(120,000)
Revenues
Cost of goods sold
Depreciation expense
Amortization expense
Interest expense
Equity in income of Sam
Net income
Father,
Inc.
12/31/2011
$ (1,360,000)
700,000
260,000
44,000
(105,000)
$ (461,000)
Sam
Corporation
12/31/2011
$ (540,000)
385,000
10,000
5,000
5,000
$ (135,000)
$ (1,265,000) $ (440,000)
(461,000)
(135,000)
260,000
65,000
$ (1,466,000) $ (510,000)
Current assets
Investment in Sam
Land
Buildings and equipment (net)
Copyright
Total assets
Accounts payable
Notes payable
Common stock
Additional paid-in capital
Retained earnings
Total liabilities and equity
965,000
733,000
292,000
877,000
$ 2,867,000
528,000
60,000
265,000
95,000
948,000
(191,000) $ (148,000)
(460,000)
(130,000)
(300,000)
(100,000)
(450,000)
(60,000)
(1,466,000)
(510,000)
$ (2,867,000) $ (948,000)
Land
Buildings
Equipment
Patents
Notes payable
Goodwill
Total
603,000
67,000
$ 670,000
(460,000)
$ 210,000
30,000
(20,000)
40,000
50,000
20,000
$
120,000
90,000
Correct!
Correct!
Correct!
Life
(years)
10
5
10
5
indefinite
Annual
Excess
Amortizations
$
(2,000)
8,000
5,000
4,000
15,000
Correct!
Accounts
Revenues
Cost of goods sold
Depreciation expense
Amortization expense
Interest expense
Investment income
Separate company net income
Consolidated net income
Income to noncontrolling interest
Income to controlling interest
Adams
Corp.
(940,000)
480,000
100,000
40,000
(108,000)
(428,000)
Barstow
Inc.
(280,000)
90,000
55,000 [E]
[E]
15,000 [E]
[I]
(120,000)
(1,367,000)
Net income
Dividends paid
Retained earnings, 12/31
(428,000)
(110,000)
(1,685,000)
(340,000) [*C]
[S]
(120,000)
70,000
(390,000)
Current assets
Investment in Barstow
610,000
702,000
250,000
Land
Buildings
Equipment
Patents
Goodwill
Total assets
380,000
490,000
873,000
150,000
250,000
150,000
3,055,000
800,000
Credit
6,000
5,000
4,000
108,000
(10,500)
Notes payable
Common stock
Retained earnings, 12/31
Noncontrolling interest
Debit
Noncontrolling Consolidated
Interest
Totals
(1,220,000)
570,000
161,000
5,000
59,000
-
(860,000)
(510,000)
(1,685,000)
(3,055,000)
[D]
[A]
[E]
[A]
[A]
[A]
(230,000) [A]
(180,000) [S]
(390,000)
(800,000)
13,500
340,000
(1,353,500)
[D]
63,000
63,000 [*C]
[S]
[A]
[I]
30,000
2,000 [A]
32,000 [E]
45,000 [E]
90,000
13,500
468,000
175,500
108,000
16,000
180,000
(425,000)
10,500
(414,500)
7,000
860,000
-
560,000
724,000
1,047,000
40,000
90,000
3,321,000
18,000
8,000
5,000
[E]
4,000
[S]
[A]
52,000
19,500
(414,500)
110,000
(1,658,000)
(1,078,000)
(510,000)
(1,658,000)
(71,500)
(75,000)
(75,000)
(3,321,000)
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
90%
$
603,000
Current assets
Land
Buildings (10-year life)
Equipment (5-year life)
Patents (10-year life)
Liabilities (5-year life)
Common stock
Retained earnings, 12/31/09
Book
Fair Market
Value
Value
$ 160,000 $ 160,000
120,000
150,000
220,000
200,000
160,000
200,000
50,000
(200,000)
(180,000)
(180,000)
(280,000)
Adams
Barstow, Inc.
Corporation Corporation
12/31/2011 12/31/2011
Debits
Current assets
Land
Buildings
Equipment
Investment in Barstow, Inc.
Cost of goods sold
Depreciation expense
Interest expense
Dividends paid
Total debits
Credits
Notes Payable
Common stock
Retained earnings, 1/1/11
Revenues
Investment income
Total credits
610,000
380,000
490,000
873,000
702,000
480,000
100,000
40,000
110,000
$ 3,785,000
860,000
510,000
1,367,000
940,000
108,000
$ 3,785,000
250,000
150,000
250,000
150,000
90,000
55,000
15,000
70,000
$ 1,030,000
230,000
180,000
340,000
280,000
$ 1,030,000