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Use the following data for problems 1015 on january 1

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Use the following data for Problems 10–15:On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of$65,000. On January 1, Suarez possessed equipment (5-year remaining life) that was under-valued on its books by $25,000. Suarez also had developed several secret formulas that Jarelassessed at $50,000. These formulas, although not recorded on Suarez’s financial records, wereestimated to have a 20-year future life.As of December 31, the financial statements appeared as follows:LO 5-7JarelSuarezRevenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$(300,000)$(200,000)Cost of goods sold. . . . . . . . . . . . . . . . . . . . . . . . . . .140,00080,000Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20,00010,000Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$(140,000)$(110,000)Retained earnings, 1/1 . . . . . . . . . . . . . . . . . . . . . . . .$(300,000)$(150,000)Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(140,000)(110,000)Dividends declared. . . . . . . . . . . . . . . . . . . . . . . . . . .–0––0–Retained earnings, 12/31 . . . . . . . . . . . . . . . . . . . .$(440,000)$(260,000)Cash and receivables . . . . . . . . . . . . . . . . . . . . . . . . .$210,000$90,000Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .150,000110,000Investment in Suarez . . . . . . . . . . . . . . . . . . . . . . . . .260,000–0–Equipment (net). . . . . . . . . . . . . . . . . . . . . . . . . . . . .440,000300,000Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 1,060,000$ 500,000Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$(420,000)$(140,000)Common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . .(200,000)(100,000)Retained earnings, 12/31 . . . . . . . . . . . . . . . . . . . . . .(440,000)(260,000)Total liabilities and equities. . . . . . . . . . . . . . . . . . .$(1,060,000)$(500,000)During the year, Jarel bought inventory for $80,000 and sold it to Suarez for $100,000. Ofthese goods, Suarez still owns 60 percent on December 31.10. What is the total of consolidated revenues?a.$500,000.b.$460,000.c.$420,000.d.$400,000.11. What is the total of consolidated cost of goods sold?a.$140,000.b.$152,000.c.$132,000.d.$145,000.12. What is the total of consolidated expenses?a.$30,000.b.$36,000.c.$37,500.d.$39,000.LO 5-2LO 5-2, 5-3LO 3-1(Chapter 3)
Consolidated Financial Statements—Intra-Entity Asset Transactions23913. What is the consolidated total of noncontrolling interest appearing on the balance sheet?a.$85,500.b.$83,100.c.$87,000.d.$70,500.14. What is the consolidated total for equipment (net) at December 31?a.$740,000.b.$756,000.c.$760,000.d.$765,000.15. What is the consolidated total for inventory at December 31?a.$240,000.b.$248,000.c.$250,000.d.$260,000.16. Following are several figures reported for Allister and Barone as of December 31, 2015:LO 5-5LO 5-7LO 5-3LO 5-2, 5-3, 5-5Net IncomeDividendsDeclaredInventory Purchases from Corgan2014$150,000$35,000$100,0002015130,00045,000120,000AllisterBaroneInventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$500,000$300,000Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,000,000800,000Investment income. . . . . . . . . . . . . . . . . . . . . . . . . . . .not givenCost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . .500,000400,000Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .230,000300,000Allister acquired 90 percent of Barone in January 2014. In allocating the newly acquiredsubsidiary’s fair value at the acquisition date, Allister noted that Barone had developed acustomer list worth $78,000 that was unrecorded on its accounting records and had a 4-yearremaining life. Any remaining excess fair value over Barone’s book value was attributed togoodwill. During 2015, Barone sells inventory costing $130,000 to Allister for $180,000. Ofthis amount, 10 percent remains unsold in Allister’s warehouse at year-end.Determine balances for the following items that would appear on Allister’s consolidatedfinancial statements for 2015:InventorySalesCost of Goods SoldOperating ExpensesNet Income Attributable to Noncontrolling Interest17. On January 1, 2014, Corgan Company acquired 80 percent of the outstanding voting stockof Smashing, Inc., for a total of $980,000 in cash and other consideration. At the acquisitiondate, Smashing had common stock of $700,000, retained earnings of $250,000, and a noncon-trolling interest fair value of $245,000. Corgan attributed the excess of fair value over Smash-

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Term
Winter
Professor
N/A
Tags
Balance Sheet, The Land, Generally Accepted Accounting Principles, Noncontrolling Interest

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