a. Determine the December 31, 2021, consolidated totals for the following accounts: b. In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for the subsidiary? c. If the parent uses the equity method, what consolidation entries would be used on a 2021 worksheet?
a. Determine the December 31, 2021, consolidated totals for the following accounts: b. In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for the subsidiary? c. If the parent uses the equity method, what consolidation entries would be used on a 2021 worksheet?
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.23E: Unusual income statement items Assume that the amount of each of the following items is material to...
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![The following are selected accounts and balances for Mergaronite Company and Hill, Inc., as of December 31, 2021. Several of
Mergaronite's accounts have been omitted. Credit balances are indicated by parentheses. Dividends were declared and paid in the
same period.
Revenues
Cost of goods sold
Depreciation expense
Investment income
Retained earnings, 1/1/21
Dividends declared
Current assets
Land
Buildings (net)
Equipment (net)
Liabilities
Common stock
Additional paid-in capital
Assume that Mergaronite acquired Hill on January 1, 2017, by issuing 7,000 shares of common stock having a par value of $10 per
share but a fair value of $100 each. On January 1, 2017, Hill's land was undervalued by $18,800, its buildings were overvalued by
$31,000, and equipment was undervalued by $61,400. The buildings had a 10-year remaining life; the equipment had a 5-year
remaining life. A customer list with an appraised value of $94,000 was developed internally by Hill and was estimated to have a 20-
year remaining useful life.
a. Determine the December 31, 2021, consolidated totals for the following accounts:
b. In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for the
subsidiary?
c. If the parent uses the equity method, what consolidation entries would be used on a 2021 worksheet?
Mergaronite
Hill
$ (594,000) $ (248,000)
94,000
264,000
108,000
NA
52,000
NA
(580,000)
(920,000)
134,000
36,000
682,000
84,000
156,000
242,000
(314,000)
(40,000)
(924,000)
Complete this question by entering your answers in the tabs below.
Revenues
Cost of goods sold
Depreciation expense
Amortization expense
204,000
312,000
502,000
206,000
(408,000)
(304,000)
(42,000)
Required A Required B Required C
Determine the December 31, 2021, consolidated totals for the following accounts: (Input all amounts as positive values.)
Consolidated
Totals
Buildings
Equipment
Customer list
Common stock
Additional paid-in capital
Consolidated totals
B)
In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for
the subsidiary?
C) prepare the SAIDE entries](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc9d2b9a8-11db-4a8c-b75c-cd1225c7d175%2F25411ae7-163d-42b0-951e-732a2a6ccae3%2Fdytcmjn_processed.png&w=3840&q=75)
Transcribed Image Text:The following are selected accounts and balances for Mergaronite Company and Hill, Inc., as of December 31, 2021. Several of
Mergaronite's accounts have been omitted. Credit balances are indicated by parentheses. Dividends were declared and paid in the
same period.
Revenues
Cost of goods sold
Depreciation expense
Investment income
Retained earnings, 1/1/21
Dividends declared
Current assets
Land
Buildings (net)
Equipment (net)
Liabilities
Common stock
Additional paid-in capital
Assume that Mergaronite acquired Hill on January 1, 2017, by issuing 7,000 shares of common stock having a par value of $10 per
share but a fair value of $100 each. On January 1, 2017, Hill's land was undervalued by $18,800, its buildings were overvalued by
$31,000, and equipment was undervalued by $61,400. The buildings had a 10-year remaining life; the equipment had a 5-year
remaining life. A customer list with an appraised value of $94,000 was developed internally by Hill and was estimated to have a 20-
year remaining useful life.
a. Determine the December 31, 2021, consolidated totals for the following accounts:
b. In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for the
subsidiary?
c. If the parent uses the equity method, what consolidation entries would be used on a 2021 worksheet?
Mergaronite
Hill
$ (594,000) $ (248,000)
94,000
264,000
108,000
NA
52,000
NA
(580,000)
(920,000)
134,000
36,000
682,000
84,000
156,000
242,000
(314,000)
(40,000)
(924,000)
Complete this question by entering your answers in the tabs below.
Revenues
Cost of goods sold
Depreciation expense
Amortization expense
204,000
312,000
502,000
206,000
(408,000)
(304,000)
(42,000)
Required A Required B Required C
Determine the December 31, 2021, consolidated totals for the following accounts: (Input all amounts as positive values.)
Consolidated
Totals
Buildings
Equipment
Customer list
Common stock
Additional paid-in capital
Consolidated totals
B)
In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for
the subsidiary?
C) prepare the SAIDE entries
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