Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $120,600. At that date, the fair value of Saver's buildings and equipment was $19,000 more than the book value. Accumulated depreciation on this date was $17,000. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price’s management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $2,000. No additional impairment occurred in 20X9. Trial balance data for Price and Saver on December 31, 20X9, are as follows: Price Corporation Saver Company Item Debit Credit Debit Credit Cash $ 53,500 $ 36,000 Accounts Receivable 88,000 15,000 Inventory 100,000 25,000 Land 58,000 26,000 Buildings & Equipment 364,000 152,000 Investment in Saver Company 135,100 Cost of Goods Sold 142,000 105,000 Wage Expense 35,000 20,000 Depreciation Expense 25,000 9,000 Interest Expense 12,000 2,000 Other Expenses 23,000 16,000 Dividends Declared 33,000 34,100 Accumulated Depreciation $ 160,000 $ 35,000 Accounts Payable 33,000 9,000 Wages Payable 8,000 5,000 Notes Payable 149,000 87,100 Common Stock 184,000 57,000 Retained Earnings 194,500 45,000 Sales 292,000 202,000 Income from Saver Company 48,100 $ 1,068,600 $ 1,068,600 $ 440,100 $ 440,100 Required: a. Prepare all consolidating entries needed to prepare a three-part consolidation worksheet as of December 31, 20X9. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $120,600. At that date, the fair value of Saver's buildings and equipment was $19,000 more than the book value. Accumulated depreciation on this date was $17,000. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price’s management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $2,000. No additional impairment occurred in 20X9. Trial balance data for Price and Saver on December 31, 20X9, are as follows: Price Corporation Saver Company Item Debit Credit Debit Credit Cash $ 53,500 $ 36,000 Accounts Receivable 88,000 15,000 Inventory 100,000 25,000 Land 58,000 26,000 Buildings & Equipment 364,000 152,000 Investment in Saver Company 135,100 Cost of Goods Sold 142,000 105,000 Wage Expense 35,000 20,000 Depreciation Expense 25,000 9,000 Interest Expense 12,000 2,000 Other Expenses 23,000 16,000 Dividends Declared 33,000 34,100 Accumulated Depreciation $ 160,000 $ 35,000 Accounts Payable 33,000 9,000 Wages Payable 8,000 5,000 Notes Payable 149,000 87,100 Common Stock 184,000 57,000 Retained Earnings 194,500 45,000 Sales 292,000 202,000 Income from Saver Company 48,100 $ 1,068,600 $ 1,068,600 $ 440,100 $ 440,100 Required: a. Prepare all consolidating entries needed to prepare a three-part consolidation worksheet as of December 31, 20X9. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 26P

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Question

	Price Corporation		Saver Company
Item	Debit	Credit		Debit	Credit
Cash	$	53,500					$	36,000
Accounts Receivable		88,000						15,000
Inventory		100,000						25,000
Land		58,000						26,000
Buildings & Equipment		364,000						152,000
Investment in Saver Company		135,100
Cost of Goods Sold		142,000						105,000
Wage Expense		35,000						20,000
Depreciation Expense		25,000						9,000
Interest Expense		12,000						2,000
Other Expenses		23,000						16,000
Dividends Declared		33,000						34,100
Accumulated Depreciation					$	160,000			$	35,000
Accounts Payable						33,000				9,000
Wages Payable						8,000				5,000
Notes Payable						149,000				87,100
Common Stock						184,000				57,000
Retained Earnings						194,500				45,000
Sales						292,000				202,000
Income from Saver Company						48,100
	$	1,068,600			$	1,068,600	$	440,100	$	440,100

Required:
a. Prepare all consolidating entries needed to prepare a three-part consolidation worksheet as of December 31, 20X9. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Prepare a three-part consolidation worksheet for 20X9. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)

c-1. Prepare a consolidated balance sheet for 20X9. (Amounts to be deducted should be indicated with a minus sign.)

c-2. Prepare a consolidated income statement for 20X9.

c-3. Prepare a retained earnings statement for 20X9.

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