1. Using this information and the information in the following trial balances on December 31, 2016, prepare a value analysis and a determination and distribution of excess schedule: Inventory, December 31 Other Current Assets Paro Company Solar Company 100,000 50,000 136,000 180,000 Investment in Solar Company 400,000 Land 50,000 50,000 Buildingsand Equipment 350,000 320,000 Accumulated Depreciation (100,000) (60,000) Goodwill Other Intangibles Current Liabilities Bonds Payable Other Long-Term Liabilities 20,000 (120,000) (40,000) (200,000) Common Stock-Paro Company (200,000) Other Paid-In Capital in Excess of Par-Paro Company (100,000) Retained Earnings-Paro Company (214,000) Common Stock-Solar Company Other Paid-In Capital in Excess of Par-Solar Company Retained Earnings-Solar Company Net Sales Cost of Goods Sold Operating Expenses (100,000) (50,000) (100,000) (190,000) (520,000) (450,000) 300,000 260,000 120,000 100,000 Subsidiary Income (72,000) Dividends Declared-Paro Company 50,000 Dividends Declared-Solar Company Totals 30,000 2. Complete a worksheet for consolidated financial statements for 2016. Include columns for eliminations and adjustments, consolidated income, NCI, controlling retained earnings, and consolidated balance sheet. On January 1, 2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000. Solar has common stock, other paid-in capital in excess of par, and retained earnings of $50,000, $100,000, and $150,000, respectively. Net income and dividends for two years for Solar are as follows: Net income Dividends 2015 2016 $60,000 $90,000 20,000 30,000 On January 1, 2015, the only undervalued tangible assets of Solar are inventory and the building. Inventory, for which FIFO is used, is worth $10,000 more than cost. The inventory is sold in 2015. The building, which is worth $30,000 more than book value, has a remaining life of 10 years, and straight-line depreciation is used. The remaining excess of cost over book value is attributed to goodwill.

1. Using this information and the information in the following trial balances on December 31, 2016, prepare a value analysis and a determination and distribution of excess schedule: Inventory, December 31 Other Current Assets Paro Company Solar Company 100,000 50,000 136,000 180,000 Investment in Solar Company 400,000 Land 50,000 50,000 Buildingsand Equipment 350,000 320,000 Accumulated Depreciation (100,000) (60,000) Goodwill Other Intangibles Current Liabilities Bonds Payable Other Long-Term Liabilities 20,000 (120,000) (40,000) (200,000) Common Stock-Paro Company (200,000) Other Paid-In Capital in Excess of Par-Paro Company (100,000) Retained Earnings-Paro Company (214,000) Common Stock-Solar Company Other Paid-In Capital in Excess of Par-Solar Company Retained Earnings-Solar Company Net Sales Cost of Goods Sold Operating Expenses (100,000) (50,000) (100,000) (190,000) (520,000) (450,000) 300,000 260,000 120,000 100,000 Subsidiary Income (72,000) Dividends Declared-Paro Company 50,000 Dividends Declared-Solar Company Totals 30,000 2. Complete a worksheet for consolidated financial statements for 2016. Include columns for eliminations and adjustments, consolidated income, NCI, controlling retained earnings, and consolidated balance sheet. On January 1, 2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000. Solar has common stock, other paid-in capital in excess of par, and retained earnings of $50,000, $100,000, and $150,000, respectively. Net income and dividends for two years for Solar are as follows: Net income Dividends 2015 2016 $60,000 $90,000 20,000 30,000 On January 1, 2015, the only undervalued tangible assets of Solar are inventory and the building. Inventory, for which FIFO is used, is worth $10,000 more than cost. The inventory is sold in 2015. The building, which is worth $30,000 more than book value, has a remaining life of 10 years, and straight-line depreciation is used. The remaining excess of cost over book value is attributed to goodwill.

1. Using this information and the information in the following trial balances on December 31, 2016, prepare a value analysis and a determination and distribution of excess schedule: Inventory, December 31 Other Current Assets Paro Company Solar Company 100,000 50,000 136,000 180,000 Investment in Solar Company 400,000 Land 50,000 50,000 Buildingsand Equipment 350,000 320,000 Accumulated Depreciation (100,000) (60,000) Goodwill Other Intangibles Current Liabilities Bonds Payable Other Long-Term Liabilities 20,000 (120,000) (40,000) (200,000) Common Stock-Paro Company (200,000) Other Paid-In Capital in Excess of Par-Paro Company (100,000) Retained Earnings-Paro Company (214,000) Common Stock-Solar Company Other Paid-In Capital in Excess of Par-Solar Company Retained Earnings-Solar Company Net Sales Cost of Goods Sold Operating Expenses (100,000) (50,000) (100,000) (190,000) (520,000) (450,000) 300,000 260,000 120,000 100,000 Subsidiary Income (72,000) Dividends Declared-Paro Company 50,000 Dividends Declared-Solar Company Totals 30,000 2. Complete a worksheet for consolidated financial statements for 2016. Include columns for eliminations and adjustments, consolidated income, NCI, controlling retained earnings, and consolidated balance sheet. On January 1, 2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000. Solar has common stock, other paid-in capital in excess of par, and retained earnings of $50,000, $100,000, and $150,000, respectively. Net income and dividends for two years for Solar are as follows: Net income Dividends 2015 2016 $60,000 $90,000 20,000 30,000 On January 1, 2015, the only undervalued tangible assets of Solar are inventory and the building. Inventory, for which FIFO is used, is worth $10,000 more than cost. The inventory is sold in 2015. The building, which is worth $30,000 more than book value, has a remaining life of 10 years, and straight-line depreciation is used. The remaining excess of cost over book value is attributed to goodwill.

Intermediate Accounting: Reporting And Analysis

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 14RE

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Related questions

Question

Complete the following

Acquired Company's Balance Sheet Before Purchase

Amortization Schedule

Income Distribution Schedules

Consolidated worksheet

eliminations

1. Using this information and the information in the following trial balances on December 31, 2016,
prepare a value analysis and a determination and distribution of excess schedule:
Inventory, December 31
Other Current Assets
Paro Company Solar Company
100,000
50,000
136,000
180,000
Investment in Solar Company
400,000
Land
50,000
50,000
Buildingsand Equipment
350,000
320,000
Accumulated Depreciation
(100,000)
(60,000)
Goodwill
Other Intangibles
Current Liabilities
Bonds Payable
Other Long-Term Liabilities
20,000
(120,000)
(40,000)
(200,000)
Common Stock-Paro Company
(200,000)
Other Paid-In Capital in Excess of Par-Paro Company
(100,000)
Retained Earnings-Paro Company
(214,000)
Common Stock-Solar Company
Other Paid-In Capital in Excess of Par-Solar Company
Retained Earnings-Solar Company
Net Sales
Cost of Goods Sold
Operating Expenses
(100,000)
(50,000)
(100,000)
(190,000)
(520,000)
(450,000)
300,000
260,000
120,000
100,000
Subsidiary Income
(72,000)
Dividends Declared-Paro Company
50,000
Dividends Declared-Solar Company
Totals
30,000
2. Complete a worksheet for consolidated financial statements for 2016. Include columns for
eliminations and adjustments, consolidated income, NCI, controlling retained earnings, and
consolidated balance sheet.

On January 1, 2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000.
Solar has common stock, other paid-in capital in excess of par, and retained earnings of $50,000, $100,000,
and $150,000, respectively. Net income and dividends for two years for Solar are as follows:
Net income
Dividends
2015
2016
$60,000
$90,000
20,000
30,000
On January 1, 2015, the only undervalued tangible assets of Solar are inventory and the building.
Inventory, for which FIFO is used, is worth $10,000 more than cost. The inventory is sold in 2015. The
building, which is worth $30,000 more than book value, has a remaining life of 10 years, and straight-line
depreciation is used. The remaining excess of cost over book value is attributed to goodwill.

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Cary Corporation has 50,000 shares of 10 par common stock authorized. The following transactions took place during 2019, the first year of the corporations existence: Sold 5,000 shares of common stock for 18 per share. Issued 5,000 shares of common stock in exchange for a patent valued at 100,000. At the end of Carys first year, total contributed capital amounted to: a. 40,000 b. 90,000 c. 100,000 d. 190,000
Ponce Towers, Inc., had 50,000 shares of common stock and 10,000 shares of 100 par value, 8% preferred stock outstanding on January 1, 2011. Each share of preferred stock is convertible into four shares of common stock. The stock has not been converted. During the year, Ponce Towers issued additional shares of common stock as follows: For 2011, Ponce Towers, Inc., had income from continuing operations of 545,000 and a 72,000 loss from discontinued operations (net of tax). Open the file EPS from the website for this book at cengagebrain.com. Enter all input items (AF) in the appropriate cells in the Data Section. Enter all formulas in the appropriate cells in the Answer Section. Enter your name in cell A1. Save the completed file as EPS2. Print the worksheet when done. Also print your formulas. Check figure: Basic earnings per share from continuing operations (cell D29), 5.94.
On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of 67,000, and the following events occurred: 1. Cash dividends of 3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of 10 par common stock. On the date of declaration, the market price of the companys common stock was 36 per share. 3. The company recalled and retired 500 shares of 100 par preferred stock. The call price was 125 per share; the stock had originally been issued for 110 per share. 4. The company discovered that it had erroneously recorded depreciation expense of 45,000 in 2018 for both financial reporting and income tax reporting. The correct depreciation for 2018 should have been 20,000. This is considered a material error. Required: 1. Prepare journal entries to record Items 1 through 4. 2. Prepare Kittsons statement of retained earnings for the year ended December 31, 2019.

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