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The following are selected accounts and balances for Mergaronite Company and H, 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 Hergaronite $(620,000) S (20,000) 276, 102.000 HELL Bevenues Cast f gode sold Depreciation espense Envestent incoe Retalned ernings, 1/1/21 Divldends declared Current assets 106,00 46,000 NA (912, 000) 124,000 210, 00 (S0, 00) 44,0e Land ildings (net) tquipnent (et) 488,00 196,000 8,000 10,000 252,000 Liahtlities Common atock Adtimal pal4-in capital (282,e) (58,000) (42,000) (924, 000) Assume that Mergaronite acquired Hill on Januaryt. 2017, by issuing 6.200 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 S18.200, its buildings were overvalued by $28.000, and equipment was undervalued by $58,800. The buildings had a 10-year remaining life, the equipment had a 5-year remaining life. A customer ist with an appraised value of $108,000 was developed internaly 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? Cthe parent uses the equity method, what consolidation entries would be used on a 2021 worksheet?

The following are selected accounts and balances for Mergaronite Company and H, 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 Hergaronite $(620,000) S (20,000) 276, 102.000 HELL Bevenues Cast f gode sold Depreciation espense Envestent incoe Retalned ernings, 1/1/21 Divldends declared Current assets 106,00 46,000 NA (912, 000) 124,000 210, 00 (S0, 00) 44,0e Land ildings (net) tquipnent (et) 488,00 196,000 8,000 10,000 252,000 Liahtlities Common atock Adtimal pal4-in capital (282,e) (58,000) (42,000) (924, 000) Assume that Mergaronite acquired Hill on Januaryt. 2017, by issuing 6.200 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 S18.200, its buildings were overvalued by $28.000, and equipment was undervalued by $58,800. The buildings had a 10-year remaining life, the equipment had a 5-year remaining life. A customer ist with an appraised value of $108,000 was developed internaly 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? Cthe parent uses the equity method, what consolidation entries would be used on a 2021 worksheet?

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 17E
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The following are selected accounts and balances for Mergaronite Company and H, 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 Cast f gode sold Depreciation espense Investent incone Retalned arnings, 1/1/21 Dividends declared Current assets Land tuildings (art) Equipment (net) Llahitities ergaronite $(620,000) S (260,000 276, 102,000 NA (912,000) 124,000 210,000 30,000 488,000 196,000 (406,000) (282,000) (58,000) 10,000 46,000 NA (s,000) 44,000 666,000 130,000 252.000 (302, 000) (42, 000) (924,000) Common stock Aditiomal pald-in capital Assume that Mergaronite acquired Hill on January 1, 2017, by issuing 6,200 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 S18,200, its buildings were overvalued by $28.000, and equipment was undervalued by $58,800. The buildings had a 10-year remaining life, the equipment had a 5-year remaining lide. A customer list with an appraised value of $108,000 was developed internaly 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?
Transcribed Image Text:The following are selected accounts and balances for Mergaronite Company and H, 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 Cast f gode sold Depreciation espense Investent incone Retalned arnings, 1/1/21 Dividends declared Current assets Land tuildings (art) Equipment (net) Llahitities ergaronite $(620,000) S (260,000 276, 102,000 NA (912,000) 124,000 210,000 30,000 488,000 196,000 (406,000) (282,000) (58,000) 10,000 46,000 NA (s,000) 44,000 666,000 130,000 252.000 (302, 000) (42, 000) (924,000) Common stock Aditiomal pald-in capital Assume that Mergaronite acquired Hill on January 1, 2017, by issuing 6,200 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 S18,200, its buildings were overvalued by $28.000, and equipment was undervalued by $58,800. The buildings had a 10-year remaining life, the equipment had a 5-year remaining lide. A customer list with an appraised value of $108,000 was developed internaly 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?
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