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In: Accounting

The following balance sheets have been prepared on December 31, 2020 for A Corp. and B...

The following balance sheets have been prepared on December 31, 2020 for A Corp. and B Inc.

A

 B

Cash

$30,000

$20,000

Inventory

$70,000

$30,000

Accounts Receivable

$180,000

$70,000

Investment in Rat

$200,000

Fixed Assets

$500,000

$90,000

Accumulated Depreciation

($280,000)

($30,000)

Total Assets

$700,000

$180,000

Current Liabilities

$120,000

$60,000

Long-Term Debt

$400,000

$20,000

Common Shares

$90,000

$40,000

Retained Earnings

$90,000

$60,000

Liabilities and Equity

$700,000

$180,000

Balance Sheets

Additional Information:

A uses the cost method to account for its 50% interest in B, which it acquired on January 1, 2017. On that date, B's retained earnings were $20,000. The acquisition differential was fully amortized by the end of 2020.

A sold Land to B during 2019 and recorded a $15,000 gain on the sale. A is still using this Land. A's December 31, 2020 inventory contained a profit of $10,000 recorded by B.

B borrowed $20,000 from A during 2020 interest-free. B has not yet repaid any of its debt to A.

Both companies are subject to a tax rate of 20%.

Prepare a Consolidated Balance Sheet for A on December 31, 2020 assuming that A's investment in B is a control investment.

Can you please show calculations in detail? (Goodwill, RE, NCI and B/S)

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ekkarill92 answered 3 years ago
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