Solution to Extra Credit Problem Exam 1 Summer I 2009

Solution to Extra Credit Problem Exam 1 Summer I 2009 -...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Accounting 401 Solution to Extra Credit Problem – Exam 1 Summer I 2009 Solution 1 – Assuming Purchase Method Consolidated Elimination Entries in General Journal Form: Equity in Subsidiary Earnings 1,475,000 Investment in Santo 1,475,000 Capital stock – Santo 6,000,000 Retained earnings – Santo 4,000,000 Investment in Santo 8,000,000 Noncontrolling interest 2,000,000 Inventory – Santo 2,000,000 Plant assets, net - Santo 8,500,000 Patents – Santo 500,000 Goodwill 2,000,000 Investment in Santo 12,000,000 Long-term liabilities 1,000,000 Note: We know that the purchase cost was $20,000,000. If $8,000,000 is attributed to the stockholders’ equity, then $12,000,000 must go against the fair value differences. Cost of goods sold 1,500,000 Depreciation expense 1,000,000 Amortization expense 125,000 Long term liabilities 100,000 Inventory 1,500,000 Plant assets, net 1,000,000 Patents 125,000 Interest expense 100,000 Noncontrolling interest in net income of Santo 1,000,000
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/09/2012 for the course ACCT 401 taught by Professor Staff during the Summer '08 term at Texas A&M.

Page1 / 3

Solution to Extra Credit Problem Exam 1 Summer I 2009 -...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online