Ch04 - Student Name Class Problem 04-35 Acquisition Method...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Student Name: Class: Problem 04-35 Acquisition Method Consolidated Balances Non- Pierson, Steele Consolidation Entries controlling Consolidated Accounts Inc. Corporation Debit Credit Interest Totals Revenues (1,843,000) (675,000) Cost of goods sold 1,100,000 322,000 Depreciation expense 125,000 120,000 Amortization expense 275,000 11,000 Interest expense 27,500 7,000 Equity in Steele income (121,500) - Separate company net income (437,000) (215,000) Consolidated net income Noncontrolling interest in Steele's income Controlling interest in CNI Retained earnings, 1/1 (2,625,000) (395,000) Net income (437,000) (215,000) Dividends paid 350,000 25,000 Retained earnings, 12/31 (2,712,000) (585,000) Current assets 1,204,000 430,000 Investment in Steele 1,854,000 - Customer base - - Buildings and equipment 931,000 863,000 Copyrights 950,000 107,000 Goodwill - - Total assets 4,939,000 1,400,000 Accounts payable (485,000) (200,000) Notes payable (542,000) (155,000) NCI in Steele Common stock (900,000) (400,000) Additional paid-in capital (300,000) (60,000) Retained earnings, 12/31 (2,712,000) (585,000) Total liabilities and stockholders' equity (4,939,000) (1,400,000) Parentheses indicate a credit balance.
Image of page 1

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

View Full Document Right Arrow Icon
Given Data P04-35 Steel company outstanding common stock acquired by Pierson Corporation 90% Cash paid by Pierson Corporation. for Steele Company shares $1,710,000 Steele owners equity amounts on 1/1/12: Common stock $400,000 Additional paid-in capital 60,000 Retained earnings 265,000 Assessed fair value of Steel's customer base $800,000 Fair-value allocation schedule: Fair value of Steele Company $1,900,000 Book value of Steele Company 725,000 Excess fair value 1,175,000 to customer base (10-year remaining life) 800,000 to goodwill $375,000 Account Balances December 31, 2013 Pierson Steele Revenues $(1,843,000) $(675,000) Cost of goods sold 1,100,000 322,000 Depreciation expense 125,000 120,000 Amortization expense 275,000 11,000 Interest expense 27,500 7,000 Equity in income of Steele (121,500) - Net income $(437,000) $(215,000) Retained earnings, 1/1 $(2,625,000) $(395,000) Net income (437,000) (215,000) Dividends paid 350,000 25,000 Retained earnings, 12/31/11 $(2,712,000) $(585,000) Current assets $1,204,000 $430,000 Investment in Steele 1,854,000 - Buildings and equipment 931,000 863,000 Copyrights 950,000 107,000 Total assets $4,939,000 $1,400,000 Accounts payable $(485,000) $(200,000) Notes payable (542,000) (155,000) Common stock (900,000) (400,000) Additional paid-in capital (300,000) (60,000) Retained earnings, 12/31 (2,712,000) (585,000) Total liabilities and equity $(4,939,000) $(1,400,000) Note: Credits are indicated by parentheses.
Image of page 2
Student Name: Class: Problem 04-37 FATHER, INC. AND SAM CORPORATION - Purchase price allocation and annual amortization Acquisition-date subsidiary fair value Book value of subsidiary
Image of page 3

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

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern