Problem 1: Raver Company acquired all of the stock of Ancil Company for $400,000. Ancil Company's balance sheet as of the date of purchase (Jan. 1) is as follows. Current assets 168,000 Liabilities 160,000 PPE, net 296,000 Common stock 200,000 Retained earnings 104,000 Total assets 464,000 Total liabilities & equity 464,000 The excess of the price paid over book value, if any, is 100% attributable to equipment. The equipment has a 8 year remaining life. The following are the balance sheets of both companies at year end (Dec. 31). Raver Ancil Current assets 209,000 144,000 PPE 464,000 255,500 Accumulated depreciation (208,000) (26,000) Investment in Ancil 381,500 Liabilities (166,000) (88,000) Common stock (400,000) (200,000) Retained earnings (272,500) (104,000) Sales (623,000) (316,000) Expenses 598,000 333,000 Subsidiary income/loss 17,000 Dividends declared 1,500 0 0 Using the above information, prepare a determination and distribution of excess schedule. Prepare the elimination entries and adjustments necessary for the consolidated worksheet.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter14: Intercorporate Investments In Common Stock

Section: Chapter Questions

Problem 28P

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Problem 1: Raver Company acquired all of the stock of Ancil Company for $400,000.
Ancil Company's balance sheet as of the date of purchase (Jan. 1) is as follows.

Current assets	168,000	Liabilities		160,000
PPE, net	296,000	Common stock		200,000
		Retained earnings		104,000
Total assets	464,000	Total liabilities & equity	464,000

The excess of the price paid over book value, if any, is 100% attributable to equipment. The
equipment has a 8 year remaining life.
The following are the balance sheets of both companies at year end (Dec. 31).
	Raver	Ancil
Current assets	209,000	144,000
PPE	464,000	255,500
Accumulated depreciation	(208,000)	(26,000)
Investment in Ancil	381,500
Liabilities	(166,000)	(88,000)
Common stock	(400,000)	(200,000)
Retained earnings	(272,500)	(104,000)
Sales	(623,000)	(316,000)
Expenses	598,000	333,000
Subsidiary income/loss	17,000
Dividends declared		1,500
	0	0

Using the above information, prepare a determination and distribution of excess schedule.
Prepare the elimination entries and adjustments necessary for the consolidated worksheet.

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