Chap004_class - 4-1Chapter 4 Consolidation - Date of...

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Unformatted text preview: 4-1Chapter 4 Consolidation - Date of Acquisition100% ownership no minority interestconsolidation worksheet Ex 4-7, 4-8Elimination Entries 1 and 24-2Consolidated Statementsseparate legal entities but only ONE reporting entityGroup of corporations under common controlInclude only transactions with external parties Eliminate inter-company transactions4-3Consolidated Statementsprepared for reportingpurposes onlyThere are no consolidated journals or ledgersMust start with separate company adjustedtrial balances each year Must repeat elimination entries each year4-4AssetsCash$ 350,000 $ 50,000 Accounts Receivable75,000 50,000 Inventory100,000 60,000 Land175,000 40,000 Buildings and Equipment800,000 600,000 Accumulated Depreciation(400,000(300,000Total Assets$1,100,000 $500,000 Liabilities and Stockholders EquityAccounts Payable$ 100,000 $100,000 Bonds Payable200,000 100,000 Common Stock500,000 200,000 Retained Earnings300,000100,000Total Liabilities and Stockholders Equity$1,100,000 $500,000 Balance Sheets Before CombinationPeerless Special Foods))4-5Investment cost $300,000Book Value of Equity Acquired:Common stock--Special FoodsRetained earnings--Special FoodsPeerlesss shareDifferentialJanuary 1, 20X1 entry:PS100%Full Ownership Purchased at Book Value4-6Investment cost$300,000 Book Value of Equity Acquired:Common stock--Special Foods$200,000Retained earnings--Special Foods100,000$300,000Peerlesss shareDifferentialJanuary 1, 20X1 entry:PS100%Full Ownership Purchased at Book Value4-7Investment cost$300,000 Book Value of Equity Acquired:Common stock--Special Foods$200,000Retained earnings--Special Foods100,000$300,000Peerlesss sharex 1.00(300,000Differential$ -0-January 1, 20X1 entry:Investment in Special Foods Stock300,000Cash300,000(Regular JE to record purchase of Special Foods stock.)PS100%Full Ownership Purchased at Book Value)4-8Balance Sheets AfterCombinationssetsCash$ 50,000 $ 50,000 Accounts Receivable75,000 50,000 Inventory100,000 60,000 Land175,000 40,000 Buildings and Equipment800,000 600,000 Accumulated Depreciation(400,000(300,000Investment in Special Foods Stock300,000otal Assets$1,100,000 $500,000 Liabilities and Stockholders EquityAccounts Payable$ 100,000 $100,000 Bonds Payable200,000 100,000 Common Stock500,000 200,000 Retained Earnings300,000100,000otal Liabilities and Stockholders Equity$1,100,000 $500,000 Peerless Special Foods))4-9Cash50,00050,000100,000Accounts Rec.75,00050,000125,000Inventory100,00060,000160,000Land175,00040,000215,000Bldg. and Equip.800,000600,0001,400,000Inv. in Sp. Foods300,000Total Debits1,500,000800,0002,000,000Accum. Depr.400,000300,000700,000Accounts Payable100,000100,000200,000Bonds Payable200,000100,000300,000Common Stock500,000200,000500,000Retained Earn.300,000100,000300,000Total Credits1,500,000800,0002,000,000100% Purchase at Book ValueTrial Balance Data Elimination Entries Account Titles Peerless Spec. Foods Debits Credits Consolidated4-10...
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This note was uploaded on 10/14/2009 for the course MGMT 503 taught by Professor Staff during the Spring '08 term at Purdue University-West Lafayette.

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Chap004_class - 4-1Chapter 4 Consolidation - Date of...

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