2 Cash 4824 Investment in Western Ranching 4824 Receive dividend 4824 A9000 x

2 cash 4824 investment in western ranching 4824

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(2) Cash 4,824 Investment in Western Ranching 4,824 Receive dividend: $4,824 = A$9,000 x 0.80 x $.67 (3) Investment in Western Ranching 50,088 Income from Western Ranching 50,088 Equity accrual for percentage of subsidiary's income: U.S.$ Sales $ 376,350 Cost of goods sold (217,800) Depreciation expense (16,800) Operating expense (85,475) Interest expense (3,705) Remeasurement gain 10,040 Subsidiary's income $ 62,610 Parent's percent x 0.80 Equity accrual $ 50,088 (4) Income from Western Ranching 6,720 Investment in Western Ranching 6,720 Amortization of differential: Buildings and Equipment = $2,800 ($28,000 / 10) Patent = 5,600 ($56,000 / 10) $8,400 x 0.80 = 6,720
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P12-27 (continued) NOT REQUIRED: Entries posted to T-accounts Investment in Income from Western Ranching Western Ranching Acquisition Price 140,000 80% Net Income 50,088 50,088 80% Net Income 4,824 80% Dividends 6,720 Amort. of Diff. 6,720 Ending Balance 178,544 43,368 Ending Balance
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P12-28 Consolidation Worksheet after Remeasurement Book Value Calculations: NCI 20% + Alamo 80% = Common Stock + Retained Earnings Original book value 18,200 72,800 63,000 28,000 + Net Income 12,522 50,088 62,610 - Dividends (1,206) (4,824) (6,030) Ending book value 29,516 118,064 63,000 84,580 Basic elimination entry Common stock 63,000 Retained earnings 28,000 Income from Western Ranching 50,088 NCI in NI of Western Ranching 12,522 Dividends declared 6,030 Investment in Western Ranching 118,064 NCI in NA of Western Ranching 29,516 Excess Value (Differential) Calculations: NCI 20% + Alamo 80% = Plant and Equipment + Patent + Acc. Depr. Beginning balance 16,800 67,200 28,000 56,000 0 Changes (1,680) (6,720) (5,600) (2,800) Ending balance 15,120 60,480 28,000 50,400 (2,800) Amortized excess value reclassification entry: Amortization Expense 5,600 Depreciation expense 2,800 Income from Western Ranching 6,720 NCI in NI of Western Ranching 1,680 Excess value (differential) reclassification entry: Plant and Equipment 28,000 Patent 50,400 Accumulated Depreciation 2,800 Investment in Western Ranching 60,480 NCI in NA of Western Ranching 15,120 Eliminate intercompany accounts: Payable to Alamo 6,480 Receivable from Western Ranching 6,480
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P12-28 (continued) Alamo Western Ranching Elimination Entries DR CR Consolidated Income Statement Sales 1,000,000 376,350 1,376,350 Remeasurement Gain 10,040 10,040 Less: COGS (600,000) (217,800) (817,800) Less: Depreciation Expense (28,000) (16,800) 2,800 (47,600) Less Amortization Expense 5,600 (5,600) Less: Operating Expense (204,000) (85,475) (289,475) Less: Interest Expense (2,000) (3,705) (5,705) Income from Western Ranching 43,368 50,088 6,720 0 Consolidated Net Income 209,368 62,610 58,488 6,720 220,210 NCI in Net Income 12,522 1,680 (10,842) Controlling Interest in Net Income 209,368 62,610 71,010 8,400 209,368 Statement of Retained Earnings Beginning Balance 179,656 28,000 28,000 179,656 Net Income 209,368 62,610 71,010 8,400 209,368 Less: Dividends Declared (50,000) (6,030) 6,030 (50,000) Ending Balance 339,024 84,580 99,010 14,430 339,024 Balance Sheet Cash 38,000 26,460 64,460 Accounts Receivable 140,000 43,200 183,200 Receivable from Western Ranching 6,480 6,480 0 Inventory 128,000 55,900 183,900 Plant & Equipment 500,000 168,000 28,000 0 696,000 Less: Accumulated Depreciation (90,000) (42,000) 0 2,800 (134,800) Patent 50,400 50,400 Investment in Western Ranching 178,544 118,064 0 60,480 Total Assets 901,024 251,560 78,400 187,824 1,043,160 Accounts Payable 60,000 32,280 92,280 Payable to Alamo 6,480 6,480 0 Interest Payable 2,000 1,800 3,800 Bonds Payable 60,000 60,000 Premium on Bonds 3,420 3,420 Common Stock 500,000 63,000 63,000 500,000 Retained Earnings 339,024 84,580 99,010 14,430 339,024 NCI in NA of Western Ranching 29,516 44,636 15,120 Total Liabilities & Equity 901,024 251,560 168,490 59,066 1,043,160
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P12-29 Foreign Currency Remeasurement [AICPA Adapted] Kiner Company's Foreign Subsidiary Remeasurement of Selected Captions into United States Dollars December 31, 20X2, and December 31, 20X1 Indirect Remeasured Balance Exchange into U.S.
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