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Business
Accounting
Income Statement Sales Cost of goods sold Gross profit Investment income Operating expenses Net income Statement of retained earnings: BOY retained earnings Net income Dividends Ending retained earnings Parent 8,318,750 (5,989,500) 2,329,250 37,400 (1,247,840) 1,118,810 5,801,070 1,118,810 (262,570) 6,657,310 Subsidiary 1,815,000 (1,089,000) 726,000 (471,900) 254,100 937,750 254,100 (37,400) 1,154,450 Consolidation Entries Dr Cr Consolidated

Income Statement Sales Cost of goods sold Gross profit Investment income Operating expenses Net income Statement of retained earnings: BOY retained earnings Net income Dividends Ending retained earnings Parent 8,318,750 (5,989,500) 2,329,250 37,400 (1,247,840) 1,118,810 5,801,070 1,118,810 (262,570) 6,657,310 Subsidiary 1,815,000 (1,089,000) 726,000 (471,900) 254,100 937,750 254,100 (37,400) 1,154,450 Consolidation Entries Dr Cr Consolidated

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 1MCQ
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Parent company acquired a subsidiary on January 1, 2015, for $1,936,000. The Purchase price was $816,200 in excess of the subsidiary's $1,119,800 book value of Stockholders' Equity. $352,000 was assigned to PPE with a remaining useful life of 10 years. $464,200 was assigned to Goodwill. On acquisition date, subsidiary reported retained earnings of $847,550. The parent uses the Cost Method of pre-consolidation Equity investment bookkeeping. The financial statements of the parent and its subsidiary for the year ended December 31, 2016. List the consolidated balances.

 

 

 

Income Statement Sales Cost of goods sold Gross profit Investment income Operating expenses Net income Statement of retained earnings: BOY retained earnings Net income Dividends Ending retained earnings Balance sheet: Assets Cash Accounts receivable Inventory Equity investment Property, plant and equipment (PPE), net Goodwill Liabilities and stockholders' equity Accounts payable Accrued liabilities Long-term liabilities Common stock APIC Retained earnings Parent 8,318,750 (5,989,500) 2,329,250 37,400 (1,247,840) 1,118,810 5,801,070 1,118,810 (262,570) 6,657,310 1,567,280 2,462,900 3,226,850 1,936,000 17,189,920 26,382,950 1,217,920 1,447,270 10,587,500 Subsidiary 775,060 5,697,890 6,657,310 1,815,000 (1,089,000) 726,000 (471,900) 254,100 937,750 254,100 (37,400) 1,154,450 468,600 421,300 540,650 1,000,450 2,431,000 173,030 226,270 605,000 121,000 151,250 1,154,450 26,382,950 2,431,000 Consolidation Entries Dr Cr Consolidated +
Transcribed Image Text:Income Statement Sales Cost of goods sold Gross profit Investment income Operating expenses Net income Statement of retained earnings: BOY retained earnings Net income Dividends Ending retained earnings Balance sheet: Assets Cash Accounts receivable Inventory Equity investment Property, plant and equipment (PPE), net Goodwill Liabilities and stockholders' equity Accounts payable Accrued liabilities Long-term liabilities Common stock APIC Retained earnings Parent 8,318,750 (5,989,500) 2,329,250 37,400 (1,247,840) 1,118,810 5,801,070 1,118,810 (262,570) 6,657,310 1,567,280 2,462,900 3,226,850 1,936,000 17,189,920 26,382,950 1,217,920 1,447,270 10,587,500 Subsidiary 775,060 5,697,890 6,657,310 1,815,000 (1,089,000) 726,000 (471,900) 254,100 937,750 254,100 (37,400) 1,154,450 468,600 421,300 540,650 1,000,450 2,431,000 173,030 226,270 605,000 121,000 151,250 1,154,450 26,382,950 2,431,000 Consolidation Entries Dr Cr Consolidated +
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