ACCT 559 Week_3_Homework.xlsx

# ACCT 559 Week_3_Homework.xlsx - Student Name Susan Xiong...

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Student Name: Susan Xiong Class: ACCT 559 - Advanced Financi Problem 03-32 a. Fair Value Allocation and Annual Amortization Annual Life Excess Allocation (years) Amortizations Land \$ 20,000 - - Buildings (30,000) 10 \$ (3,000) Equipment 60,000 5 12,000 Customer list 100,000 20 5,000 Total \$ 14,000 Correct! Account Name Balance Explanation Revenues \$ 850,000 Cost of goods sold \$ 380,000 Depreciation expense \$ 179,000 Amortization expense \$ 5,000 Buildings (net) \$ 625,000 Equipment (net) \$ 450,000 Customer list \$ 75,000 Common stock \$ 300,000 Additional paid-in capital \$ 50,000 The consolidated revenues is the sum of both the compan \$600,000 + \$250,000 = \$850,000 The consolidated CoGS is the sum of both the company's \$280,000 + \$100,000 = \$380,000 The consolidated dep exp is the sum of both the company the dep exp on excess FV of BV for building and equipme \$120,000 + \$50,000 + \$12,000 - \$3,000 = \$179,000 The cons amort exp is the sum of both the company's amo amort exp on excess FV of BV for customer list. \$0 + \$0 + \$5,000 = \$5,000 The cons net of buildings is the sum of both the company' plus (minus) the increase (decrease) in FV of building, and (decreased) by the depreciation on the FV decrease (incre \$500,000 + \$140,000 - \$30,000 + (\$3,000 x 5 years) = \$62 The cons net of equipment is the sum of both the compan plus (minus) the increase (decrease) in FV of equipment, (decreased) by the depreciation on the FV decrease (incre \$200,000 + \$250,000 + \$60,000 - (\$12,000 x 5 years) = \$4 The cons customer list is the sum of both the company's c plus (minus) the increase (decrease) in FV of customer lis increased (decreased) by the amortization on the FV decr (increase). The cons common stock is the parent's common stock on acquired company's shares are all bought by the parent co The cons additional paid-in capital is the parent's add paid because the acq'd company's shares are all bought by the company.

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Student Name: Susan Xiong Class: ACCT 559 - Advanced Financi Problem 03-32 Part b. Why can consolidated totals be determined without knowing the consolidation method used? Part c. If the equity method is used by the parent, what consolidation entries would be used? MERGARONITE COMPANY General Journal Account Debit Credit Consolidation Entry S Common stock (Hill) 40,000 Correct! Additional paid-in capital (Hill) 160,000 Correct! Retained earnings, 1/1 600,000 Correct! Investment in Hill 800,000 Correct! (To eliminate beginning stockholders' equity of subsidiary) Consolidation Entry A Land 20,000 Correct! Equipment (net) 12,000 Correct! Customer list (net) 80,000 Correct! Buildings (net) 18,000 Correct! Investment in Hill 94,000 Correct! (To record unamortized allocation balances as of beginning of current year) Consolidation Entry I Investment income 86,000 Correct! Investment in Hill 86,000 Correct! (To remove equity income recognized during year-equity method accrual [based on subsidiary's income] less amortization for the year) Consolidation Entry D Investment in Hill 40,000 Correct!
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