ADVANCED ACCTG W/CONNECT CODE >BI<
13th Edition
ISBN: 9781264109869
Author: Hoyle
Publisher: MCG CUSTOM
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Question
Chapter 5, Problem 35P
a.
To determine
Prepare a worksheet to consolidate the separate 2018 financial statements for Company G and Company K.
a.
Expert Solution
Explanation of Solution
Worksheet to consolidate the separate 2018 financial statements for Company G and Company K:
Company G and Company K | ||||||
Consolidation Worksheet | ||||||
Year ending December 31, 2018 | ||||||
Income statement | Company G | Company K | Debit | Credit | Non-controlling interest | Consolidated Balances |
Revenues | $ (800,000) | $ (500,000) | $ 200,000 | $(1,100,000) | ||
Cost of goods sold | $ 500,000 | $ 300,000 | $ 12,000 | $ 10,000 | $ 602,000 | |
$ 200,000 | ||||||
Operating expense | $ 100,000 | $ 60,000 | E 5,000 | $ 165,000 | ||
Equity in income of Company K | $ (84,000) | I 84,000 | $ - | |||
Net income | $ (284,000) | $ (140,000) | ||||
Consolidated net income | $ (333,000) | |||||
Share of non-controlling interest in net income | $ (53,200) | $ 53,200 | ||||
Share of controlling interest in net income | $ (279,800) | |||||
Balance Sheet | ||||||
Cash | $ 177,000 | $ 90,000 | $ 267,000 | |||
| $ 356,000 | $ 410,000 | $ 40,000 | $ 726,000 | ||
Inventory | $ 440,000 | $ 320,000 | $ 12,000 | $ 748,000 | ||
Investment in Company K | $ 726,000 | $ - | D 36,000 | $ 9,000 | ||
$ 612,000 | ||||||
$ 84,000 | ||||||
$ 57,000 | ||||||
Land | $ 180,000 | $ 390,000 | $ 40,000 | $ 530,000 | ||
Building and equipment | $ 496,000 | $ 300,000 | $ 796,000 | |||
Customer list | $ 380,000 | $ 110,000 | A 95,000 | E 5,000 | $ 90,000 | |
Total assets | $ 2,755,000 | $ 1,620,000 | $ 3,157,000 | |||
Liabilities | $ (480,000) | $ (400,000) | $ 40,000 | $ (920,000) | ||
Common stock | $ (610,000) | $ (320,000) | $ 320,000 | $ (610,000) | ||
Additional paid-in capital | $ - | $ (90,000) | $ 90,000 | $ - | ||
| $ (1,285,000) | $ (700,000) | $(1,231,800) | |||
Non-controlling interest in Company K | $ 408,000 | $ 408,000 | ||||
A $38,000 | $ 38,000 | |||||
$ 475,200 | $ 475,200 | |||||
Total liabilities and equity | $ (2,375,000) | $ (1,510,000) | $ 1,551,000 | $ 1,551,000 | $ 3,157,000 |
Table: (1)
Working note:
Statement of retained earnings | Company G | Company K | Debit | Credit | Non-controlling interest | Consolidated Balances |
Retained earnings on 01/01 | $ (1,116,000) | $ (620,000) | $ 40,000 | $(1,067,000) | ||
$ 9,000 | ||||||
$ 10,000 | ||||||
$ 610,000 | ||||||
Net Income | $ (284,000) | $ (140,000) | $ (279,800) | |||
Dividends declared | $ 115,000 | $ 60,000 | D 36,000 | $ 24,000 | $ 115,000 | |
Retained earnings on 31/12 | $ (1,285,000) | $ (700,000) | $(1,231,800) |
Table: (2)
b.
To determine
Explain how the consolidation entries in requirement (a) would have differed if Company G had sold a building with a $60,000 book value (cost of $140,000) to Company K for $100,000 instead of land.
b.
Expert Solution
Explanation of Solution
Entry TA:
Date | Accounts Title and Explanation | Post Ref. | Debit ($) | Credit ($) |
Retained earnings of Company K on 01/01/2013 | $ 36,000 | |||
Buildings | $ 40,000 | |||
Accumulated | $ 76,000 | |||
(being excess depreciation removed) |
Table: (3)
Entry ED:
Date | Accounts Title and Explanation | Post Ref. | Debit ($) | Credit ($) |
Accumulated depreciation | $ 4,000 | |||
Depreciation expense | $ 4,000 | |||
(being excess depreciation on building recorded) |
Table: (4)
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Chapter 5 Solutions
ADVANCED ACCTG W/CONNECT CODE >BI<
Ch. 5 - Prob. 1QCh. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - James, Inc., sells inventory to Matthews Company,...Ch. 5 - Prob. 6QCh. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - Prob. 10Q
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - Use the same information as in problem (5) except...Ch. 5 - Angela, Inc., holds a 90 percent interest in Corby...Ch. 5 - Prob. 8PCh. 5 - Thomson Corporation owns 70 percent of the...Ch. 5 - Prob. 10PCh. 5 - What is the total of consolidated cost of goods...Ch. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - What is the consolidated total for inventory at...Ch. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Akron, Inc., owns all outstanding stock of Toledo...Ch. 5 - Prob. 22PCh. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Prob. 25PCh. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Following are financial statements for Moore...Ch. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 34PCh. 5 - Prob. 35PCh. 5 - Prob. 36PCh. 5 - Prob. 1DYSCh. 5 - Hamilton Hawks Players Association and Mr....
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