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Star & Anderson SAOG. acquired all of the common stock of Wilkinson SAOG. on January 1,...

Star & Anderson SAOG. acquired all of the common stock of Wilkinson SAOG. on January 1, 2018.  As of that date, Wilkinson had the following trial balance:

Particulars

Debit

Credit

Sundry Creditors

30,000

Land & Buildings (10 year  life)

70,000

Additional Paid-in –Capital

30,000

Sundry Debtors

25,000

Cash and bank balances

18,000

Short Term Investments

17,000

Equity share capital

150,000

Inventory

55,000

Plant and Equipment (4 year life)

120,000

Land

45,000

Long term borrowings ( Maturity 31/12/2020

90,000

Retained earnings (Opening Balance)

60,000

Supplies

10,000

Total

360,000

360,000

During 2018, Wilkinson SAOG reported net income of OMR 48,000 while paying dividends of OMR 6,000.   

During 2019, Wilkinson SAOG reported net income of OMR 66,000 while paying dividends of OMR 18,000.
Assume that Star & Anderson SAOG.  acquired the common stock of Wilkinson SAOG. for OMR 294,000 in cash. As of January 1, 2018, Wilkinson SAOG land had a fair value of OMR 51,000, its buildings were valued at OMR 94,000, and its equipment was appraised at OMR 108,000. Any excess of consideration transferred over fair value of assets and liabilities acquired is due to an unamortized patent to be amortized over 5 years.

Star & Anderson SAOG decided to use the equity methodfor this investment.

Required:   Prepare consolidation worksheet entriesfor December 31, 2018.

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Expert Solution

ekkarill92 answered 1 year ago
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