Consolidation Working Paper, Noncontrolling Interest, Intercompany Merchandise Transactions
Kellogg Company (Kellogg's) acquired 80% of the outstanding stock of Wholesome & Hearty Foods ("Wholesome") at the end of 2007 for cash and stock totaling $144 million. Assume that Wholesome's assets and liabilities were fairly reported at the date of acquisition, except for these items:
| (in thousands) | Book Value | Fair Value |
|---|---|---|
| Plant & Equipment, net (10-year life, straight-line) | $180,000 | $162,000 |
| Secret cookie recipe (10-year life, straight-line) | 0 | 30,000 |
| Long-term debt (4-year life, straight-line) | 36,000 | 40,800 |
Wholesome's book value at the date of acquisition was $82.8 million, and the fair value of the 20% noncontrolling interest was $42 million. It is now December 31, 2013 (the end of the sixth year since acquisition). Impairment testing on the goodwill arising in this acquisition reveals that total impairment during 2008-2012 is $2.4 million, and impairment in 2013 is $1.2 million.
Wholesome sells merchandise and raw materials to Kellogg's at a markup of 30% on cost. Here is information on these intercompany sales (in thousands):
| Inventory, January 1, 2013, reported on Kellogg's books | $12,480 |
| Inventory, December 31, 2013, reported on Kellogg's books | 15,600 |
| Transfer price for 2013 sales from Wholesome to Kellogg's | 72,000 |
Below are the separate trial balances of Kellogg's and Wholesome at December 31, 2013.
| Dr(Cr) | ||
|---|---|---|
| (in thousands) | Kellogg's | Wholesome |
| Current assets | $42,000 | $24,000 |
| Plant and equipment, net | 315,180 | 230,400 |
| Investment in Wholesome | 163,380 | -- |
| Identifiable intangibles | 120,000 | 12,000 |
| Current liabilities | (36,000) | (30,000) |
| Long-term debt | (420,000) | (120,000) |
| Capital stock | (96,000) | (64,800) |
| Retained earnings, January 1 | (77,796) | (45,600) |
| Sales revenue | (480,000) | (168,000) |
| Equity in net income of Wholesome | (2,364) | -- |
| Cost of sales | 300,000 | 78,000 |
| Operating expenses | 171,600 | 84,000 |
| Totals | $0 | $0 |
In your answers below, present all numbers in thousands; round
answers to the nearest thousand.
(a) Calculate the initial goodwill arising from this acquisition,
and its allocation to the controlling and noncontrolling
interests.
When appropriate, use negative signs with your revaluation answers (left column only). Do not use negative signs with your answers in the right column.
| Calculation of goodwill (in thousands) | ||
|---|---|---|
| Acquisition cost | $Answer | |
| Fair value of noncontrolling interest | Answer | |
| Total fair value | $Answer | |
| Book value of Wholesome | $Answer | |
| Revaluations: | ||
| Plant and equipment, net | Answer | |
| Intangibles | Answer | |
| Long-term debt | Answer | Answer |
| Goodwill | $Answer | |
| Allocation of goodwill (in thousands) | |
|---|---|
| Total goodwill | $Answer |
| Kellogg's goodwill | Answer |
| Goodwill to noncontrolling interest | $Answer |
(b) Prepare a schedule computing Kellogg's equity in net income of Wholesome and noncontrolling interest in net income for 2013.
Use negative signs with revaluation and inventory profit answers that reduce the total(s).
| (in thousands) | Total | Equity in net income of Wholesome | Noncontrolling interest in net income of Wholesome |
|---|---|---|---|
| Wholesome's reported net income for 2013 | $Answer | $Answer | $Answer |
| Revaluation writeoffs for 2013: | |||
| Plant & Equipment | Answer | Answer | Answer |
| Intangibles | Answer | Answer | Answer |
| Goodwill | Answer | Answer | Answer |
| Intercompany sales adjustments: | |||
| Upstream beg. inventory profit confirmed | Answer | Answer | Answer |
| Upstream end. inventory profit unconfirmed | Answer | Answer | Answer |
| Total | $Answer | $Answer | $Answer |
(c) Prepare a working paper to consolidate the trial balances of Kellogg's and Wholesome at December 31, 2013.
Remember to use negative signs with your credit balance answers in the Consolidated Balances column.
| Consolidation Working Paper | |||||||
|---|---|---|---|---|---|---|---|
| Trial Balances Taken From Books | Eliminations | ||||||
| (in thousands) |
Kellogg's Dr (Cr) |
Wholesome Dr (Cr) |
Debit | Credit | Consolidated
Balances Dr (Cr) |
||
| Current assets | $42,000 | $24,000 | Answer | (I-3) | $Answer | ||
| Plant and equipment, net | 315,180 | 230,400 | (O) | Answer | Answer | (R) | Answer |
| Investment in Wholesome | 163,380 | - | Answer | (C) | Answer | ||
| Answer | (E) | ||||||
| Answer | (R) | ||||||
| Identifiable intangibles | 120,000 | 12,000 | (R) | Answer | Answer | (O) | Answer |
| Goodwill | - | - | (R) | Answer | Answer | (O) | Answer |
| Current liabilities | (36,000) | (30,000) | Answer | ||||
| Long-term debt | (420,000) | (120,000) | Answer | ||||
| Capital stock | (96,000) | (64,800) | (E) | Answer | Answer | ||
| Retained earnings, Jan. 1 | (77,796) | (45,600) | (I-2) | Answer | Answer | ||
| (E) | Answer | ||||||
| Noncontrolling interest | Answer | (E) | Answer | ||||
| Answer | (R) | ||||||
| Answer | (N) | ||||||
| Sales revenue | (480,000) | (168,000) | (I-1) | Answer | Answer | ||
| Equity in NI of Wholesome | (2,364) | - | (C) | Answer | Answer | ||
| Cost of goods sold | 300,000 | 78,000 | (I-3) | Answer | Answer | (I-2) | Answer |
| Answer | (I-1) | ||||||
| Operating expenses | 171,600 | 84,000 | (O) | Answer | Answer | ||
| Noncontrolling interest in NI | - | - | (N) | Answer | - | Answer | |
| Total | $0 | $0 | $Answer | $Answer | $Answer | ||
In: Accounting
Date of Acquisition Consolidation Eliminating Entries, Bargain Purchase
Peregrine Company acquired 80 percent of Sparrow Company’s common stock for $20,000,000 in cash; fees paid to an outside firm to estimate the earning power of Sparrow and the fair values of its properties amounted to $2,500,000. Sparrow’s equity consisted of $3,000,000 in capital stock, $25,000,000 in retained earnings, $1,500,000 in accumulated other comprehensive loss, and $500,000 in treasury stock. Book values of Sparrow’s identifiable assets and liabilities approximated their fair values except as noted below:
|
Book value |
Fair value |
|
|---|---|---|
|
Land |
$1,000,000 |
$300,000 |
|
Other plant assets, net |
6,000,000 |
4,000,000 |
|
Identifiable intangible assets |
-- |
3,000,000 |
Assume that the fair values above have been carefully evaluated for accuracy. The fair value of the noncontrolling interest is estimated to be $4,000,000 at the date of acquisition.
Required
a. Calculate the gain on acquisition and prepare Peregrine’s acquisition entry.
Enter answers in thousands ($20,000,000 equals $20,000 in thousands).
|
Description |
Debit |
Credit |
|
|---|---|---|---|
|
Investment in Sparrow |
Answer |
Answer |
|
|
Answer |
Answer |
Answer |
|
|
Cash |
Answer |
Answer |
|
|
Answer |
Answer |
Answer |
b. Prepare the working paper eliminating entries needed to consolidate Peregrine and Sparrow at the date of acquisition.
Enter answers in thousands ($20,000,000 equals $20,000 in thousands).
|
Ref. |
Description |
Debit |
Credit |
|---|---|---|---|
|
(E) |
Capital stock |
Answer |
Answer |
|
Answer |
Answer |
Answer |
|
|
Answer |
Answer |
Answer |
|
|
Treasury stock |
Answer |
Answer |
|
|
Investment in Sparrow |
Answer |
Answer |
|
|
Noncontrolling interest in Sparrow |
Answer |
Answer |
|
|
Identifiable intangible assets |
Answer |
Answer |
|
|
(R) |
Answer |
Answer |
Answer |
|
Answer |
Answer |
Answer |
|
|
Land |
Answer |
Answer |
|
|
Investment in Sparrow |
Answer |
Answer |
In: Accounting
Pratt Company acquired all of Spider, Inc.’s outstanding shares on December 31, 2018, for $495,000 cash. Pratt will operate Spider as a wholly owned subsidiary with a separate legal and accounting identity. Although many of Spider’s book values approximate fair values, several of its accounts have fair values that differ from book values. In addition, Spider has internally developed assets that remain unrecorded on its books. In deriving the acquisition price, Pratt assessed Spider’s fair and book value differences as follows:
|
Book Values |
Fair Values |
|
|---|---|---|
|
Computer software |
$ 20,000 |
$ 70,000 |
|
Equipment |
40,000 |
30,000 |
|
Client contracts |
–0– |
100,000 |
|
In-process research and development |
–0– |
40,000 |
|
Notes payable |
(60,000) |
(65,000) |
At December 31, 2018, the following financial information is available for consolidation:
Page 83
|
Pratt |
Spider |
|
|---|---|---|
|
Cash |
$ 36,000 |
$ 18,000 |
|
Receivables |
116,000 |
52,000 |
|
Inventory |
140,000 |
90,000 |
|
Investment in Spider |
495,000 |
–0– |
|
Computer software |
210,000 |
20,000 |
|
Buildings (net) |
595,000 |
130,000 |
|
Equipment (net) |
308,000 |
40,000 |
|
Client contracts |
–0– |
–0– |
|
Goodwill |
–0– |
–0– |
|
Total assets |
$ 1,900,000 |
$ 350,000 |
|
Accounts payable |
$ (88,000) |
$ (25,000) |
|
Notes payable |
(510,000) |
(60,000) |
|
Common stock |
(380,000) |
(100,000) |
|
Additional paid-in capital |
(170,000) |
(25,000) |
|
Retained earnings |
(752,000) |
(140,000) |
|
Total liabilities and equities |
$(1,900,000) |
$(350,000) |
Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2018.
In: Accounting
Pratt Company acquired all of Spider, Inc.’s outstanding shares on December 31, 2018, for $487,350 cash. Pratt will operate Spider as a wholly owned subsidiary with a separate legal and accounting identity. Although many of Spider’s book values approximate fair values, several of its accounts have fair values that differ from book values. In addition, Spider has internally developed assets that remain unrecorded on its books. In deriving the acquisition price, Pratt assessed Spider’s fair and book value differences as follows:
| Book Values | Fair Values | ||||||
| Computer software | $ | 64,000 | $ | 104,000 | |||
| Equipment | 66,500 | 47,200 | |||||
| Client contracts | 0 | 103,000 | |||||
| In-process research and development | 0 | 32,000 | |||||
| Notes payable | (90,000 | ) | (99,850 | ) | |||
At December 31, 2018, the following financial information is available for consolidation:
| Pratt | Spider | ||||||
| Cash | $ | 7,700 | $ | 36,500 | |||
| Receivables | 152,000 | 52,500 | |||||
| Inventory | 155,000 | 89,500 | |||||
| Investment in Spider | 487,350 | 0 | |||||
| Computer software | 216,500 | 64,000 | |||||
| Buildings (net) | 601,500 | 155,000 | |||||
| Equipment (net) | 306,000 | 66,500 | |||||
| Client contracts | 0 | 0 | |||||
| Goodwill | 0 | 0 | |||||
| Total assets | $ | 1,926,050 | $ | 464,000 | |||
| Accounts payable | $ | (90,800 | ) | $ | (73,500 | ) | |
| Notes payable | (529,250 | ) | (90,000 | ) | |||
| Common stock | (380,000 | ) | (100,000 | ) | |||
| Additional paid-in capital | (170,000 | ) | (25,000 | ) | |||
| Retained earnings | (756,000 | ) | (175,500 | ) | |||
| Total liabilities and equities | $ | (1,926,050 | ) | $ | (464,000 | ) | |
Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2018.
In: Accounting
Consolidation Working Paper, Noncontrolling Interest, Intercompany Merchandise Transactions
Kellogg Company (Kellogg's) acquired 75% of the outstanding stock of Wholesome & Hearty Foods ("Wholesome") at the end of 2007 for cash and stock totaling $240 million. Assume that Wholesome's assets and liabilities were fairly reported at the date of acquisition, except for these items:
| (in thousands) | Book Value | Fair Value |
|---|---|---|
| Plant & Equipment, net (10-year life, straight-line) | $300,000 | $270,000 |
| Veggie Burger recipe (10-year life, straight-line) | 0 | 50,000 |
| Long-term debt (4-year life, straight-line) | 60,000 | 68,000 |
Wholesome's book value at the date of acquisition was $148 million, and the fair value of the 25% noncontrolling interest was $70 million. It is now December 31, 2013 (the end of the sixth year since acquisition). Impairment testing on the goodwill arising in this acquisition reveals that total impairment during 2008-2012 is $2 million, and impairment in 2013 is $1 million.
Wholesome sells merchandise and raw materials to Kellogg's at a markup of 30% on cost. Here is information on these intercompany sales (in thousands):
| Inventory, January 1, 2013, reported on Kellogg's books | $20,800 |
| Inventory, December 31, 2013, reported on Kellogg's books | 26,000 |
| Transfer price for 2013 sales from Wholesome to Kellogg's | 120,000 |
Below are the separate trial balances of Kellogg's and Wholesome at December 31, 2013.
| Dr(Cr) | ||
|---|---|---|
| (in thousands) | Kellogg's | Wholesome |
| Current assets | $35,000 | $40,000 |
| Plant and equipment, net | 256,300 | 384,000 |
| Investment in Wholesome | 264,600 | -- |
| Identifiable intangibles | 100,000 | 20,000 |
| Current liabilities | (30,000) | (50,000) |
| Long-term debt | (350,000) | (200,000) |
| Capital stock | (100,000) | (108,000) |
| Retained earnings, January 1 | (136,600) | (76,000) |
| Sales revenue | (425,000) | (280,000) |
| Equity in net income of Wholesome | (4,300) | -- |
| Cost of sales | 250,000 | 130,000 |
| Operating expenses | 140,000 | 140,000 |
| Totals | $0 | $0 |
In your answers below, present all numbers in thousands; round
answers to the nearest thousand.
(a) Calculate the initial goodwill arising from this acquisition,
and its allocation to the controlling and noncontrolling
interests.
When appropriate, use negative signs with your revaluation answers (left column only). Do not use negative signs with your answers in the right column.
| Calculation of goodwill (in thousands) | ||
|---|---|---|
| Acquisition cost | $Answer | |
| Fair value of noncontrolling interest | Answer | |
| Total fair value | $Answer | |
| Book value of Wholesome | $Answer | |
| Revaluations: | ||
| Plant and equipment, net | Answer | |
| Intangibles | Answer | |
| Long-term debt | Answer | Answer |
| Goodwill | $Answer | |
| Allocation of goodwill (in thousands) | |
|---|---|
| Total goodwill | $Answer |
| Kellogg's goodwill | Answer |
| Goodwill to noncontrolling interest | $Answer |
(b) Prepare a schedule computing Kellogg's equity in net income of Wholesome and noncontrolling interest in net income for 2013.
Use negative signs with revaluation and inventory profit answers that reduce the total(s).
| (in thousands) | Total | Equity in net income of Wholesome | Noncontrolling interest in net income of Wholesome |
|---|---|---|---|
| Wholesome's reported net income for 2013 | $Answer | $Answer | $Answer |
| Revaluation writeoffs for 2013: | |||
| Plant & Equipment | Answer | Answer | Answer |
| Intangibles | Answer | Answer | Answer |
| Goodwill | Answer | Answer | Answer |
| Intercompany sales adjustments: | |||
| Upstream beg. inventory profit confirmed | Answer | Answer | Answer |
| Upstream end. inventory profit unconfirmed | Answer | Answer | Answer |
| Total | $Answer | $Answer | $Answer |
(c) Prepare a working paper to consolidate the trial balances of Kellogg's and Wholesome at December 31, 2013.
Remember to use negative signs with your credit balance answers in the Consolidate Balances column.
| Consolidation Working Paper | |||||||
|---|---|---|---|---|---|---|---|
| Trial Balances Taken From Books | Eliminations | ||||||
| (in thousands) |
Kellogg's Dr (Cr) |
Wholesome Dr (Cr) |
Debit | Credit | Consolidated
Balances Dr (Cr) |
||
| Current assets | $35,000 | $40,000 | Answer | (I-3) | $Answer | ||
| Plant and equipment, net | 256,300 | 384,000 | (O) | Answer | Answer | (R) | Answer |
| Investment in Wholesome | 264,600 | - | Answer | (C) | Answer | ||
| Answer | (E) | ||||||
| Answer | (R) | ||||||
| Identifiable intangibles | 100,000 | 20,000 | (R) | Answer | Answer | (O) | Answer |
| Goodwill | - | - | (R) | Answer | Answer | (O) | Answer |
| Current liabilities | (30,000) | (50,000) | Answer | ||||
| Long-term debt | (350,000) | (200,000) | Answer | ||||
| Capital stock | (100,000) | (108,000) | (E) | Answer | Answer | ||
| Retained earnings, Jan. 1 | (136,600) | (76,000) | (I-2) | Answer | Answer | ||
| (E) | Answer | ||||||
| Noncontrolling interest | Answer | (E) | Answer | ||||
| Answer | (R) | ||||||
| Answer | (N) | ||||||
| Sales revenue | (425,000) | (280,000) | (I-1) | Answer | Answer | ||
| Equity in NI of Wholesome | (4,300) | - | (C) | Answer | Answer | ||
| Cost of goods sold | 250,000 | 130,000 | (I-3) | Answer | Answer | (I-2) | Answer |
| Answer | (I-1) | ||||||
| Operating expenses | 140,000 | 140,000 | (O) | Answer | Answer | ||
| Noncontrolling interest in NI | - | - | (N) | Answer | - | Answer | |
| Total | $0 | $0 | $Answer | $Answer | $Answer | ||
In: Accounting
Pratt Company acquired all of Spider, Inc.’s outstanding shares on December 31, 2018, for $550,200 cash. Pratt will operate Spider as a wholly owned subsidiary with a separate legal and accounting identity. Although many of Spider’s book values approximate fair values, several of its accounts have fair values that differ from book values. In addition, Spider has internally developed assets that remain unrecorded on its books. In deriving the acquisition price, Pratt assessed Spider’s fair and book value differences as follows:
| Book Values | Fair Values | ||||||
| Computer software | $ | 26,000 | $ | 90,500 | |||
| Equipment | 60,000 | 43,300 | |||||
| Client contracts | 0 | 139,000 | |||||
| In-process research and development | 0 | 26,000 | |||||
| Notes payable | (103,500 | ) | (113,100 | ) | |||
At December 31, 2018, the following financial information is available for consolidation:
| Pratt | Spider | ||||||
| Cash | $ | 9,400 | $ | 43,000 | |||
| Receivables | 113,500 | 89,000 | |||||
| Inventory | 144,000 | 100,000 | |||||
| Investment in Spider | 550,200 | 0 | |||||
| Computer software | 242,500 | 26,000 | |||||
| Buildings (net) | 601,250 | 150,500 | |||||
| Equipment (net) | 279,000 | 60,000 | |||||
| Client contracts | 0 | 0 | |||||
| Goodwill | 0 | 0 | |||||
| Total assets | $ | 1,939,850 | $ | 468,500 | |||
| Accounts payable | $ | (95,100 | ) | $ | (55,000 | ) | |
| Notes payable | (519,750 | ) | (103,500 | ) | |||
| Common stock | (380,000 | ) | (100,000 | ) | |||
| Additional paid-in capital | (170,000 | ) | (25,000 | ) | |||
| Retained earnings | (775,000 | ) | (185,000 | ) | |||
| Total liabilities and equities | $ | (1,939,850 | ) | $ | (468,500 | ) | |
Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2018.
In: Accounting
Pratt Company acquired all of Spider, Inc.’s outstanding shares on December 31, 2018, for $513,100 cash. Pratt will operate Spider as a wholly owned subsidiary with a separate legal and accounting identity. Although many of Spider’s book values approximate fair values, several of its accounts have fair values that differ from book values. In addition, Spider has internally developed assets that remain unrecorded on its books. In deriving the acquisition price, Pratt assessed Spider’s fair and book value differences as follows:
| Book Values | Fair Values | ||||||
| Computer software | $ | 65,500 | $ | 120,750 | |||
| Equipment | 82,500 | 68,100 | |||||
| Client contracts | 0 | 129,000 | |||||
| In-process research and development | 0 | 30,250 | |||||
| Notes payable | (90,400 | ) | (95,400 | ) | |||
At December 31, 2018, the following financial information is available for consolidation:
| Pratt | Spider | ||||||
| Cash | $ | 13,700 | $ | 21,400 | |||
| Receivables | 140,500 | 41,500 | |||||
| Inventory | 144,500 | 79,500 | |||||
| Investment in Spider | 513,100 | 0 | |||||
| Computer software | 229,000 | 65,500 | |||||
| Buildings (net) | 569,000 | 130,000 | |||||
| Equipment (net) | 366,000 | 82,500 | |||||
| Client contracts | 0 | 0 | |||||
| Goodwill | 0 | 0 | |||||
| Total assets | $ | 1,975,800 | $ | 420,400 | |||
| Accounts payable | $ | (93,300 | ) | $ | (59,500 | ) | |
| Notes payable | (525,500 | ) | (90,400 | ) | |||
| Common stock | (380,000 | ) | (100,000 | ) | |||
| Additional paid-in capital | (170,000 | ) | (25,000 | ) | |||
| Retained earnings | (807,000 | ) | (145,500 | ) | |||
| Total liabilities and equities | $ | (1,975,800 | ) | $ | (420,400 | ) | |
Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2018.
In: Accounting
|
Pratt Company acquired all of Spider, Inc.’s outstanding shares on December 31, 2015, for $528,900 cash. Pratt will operate Spider as a wholly owned subsidiary with a separate legal and accounting identity. Although many of Spider’s book values approximate fair values, several of its accounts have fair values that differ from book values. In addition, Spider has internally developed assets that remain unrecorded on its books. In deriving the acquisition price, Pratt assessed Spider’s fair and book value differences as follows: |
| Book Values |
Fair Values |
|||
| Computer software | $ | 25,000 | $ | 72,500 |
| Equipment | 44,200 | 33,800 | ||
| Client contracts | 0 | 116,500 | ||
| In-process research and development | 0 | 38,250 | ||
| Notes payable | (75,500) | (84,450) | ||
| At December 31, 2015, the following financial information is available for consolidation: |
| Pratt | Spider | ||||
| Cash | $ | 15,000 | $ | 19,300 | |
| Receivables | 105,500 | 70,000 | |||
| Inventory | 160,500 | 70,500 | |||
| Investment in Spider | 528,900 | 0 | |||
| Computer software | 223,500 | 25,000 | |||
| Buildings (net) | 612,250 | 173,500 | |||
| Equipment (net) | 307,000 | 44,200 | |||
| Client contracts | 0 | 0 | |||
| Goodwill | 0 | 0 | |||
| Total assets | $ | 1,952,650 | $ | 402,500 | |
| Accounts payable | $ | (91,400) | $ | (34,500) | |
| Notes payable | (552,250) | (75,500) | |||
| Common stock | (380,000) | (100,000) | |||
| Additional paid-in capital | (170,000) | (25,000) | |||
| Retained earnings | (759,000) | (167,500) | |||
| Total liabilities and equities | $ | (1,952,650) | $ | (402,500) | |
Note: Parentheses indicate a credit balance.
|
Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2015. |
In: Accounting
In: Accounting
Pepper Company acquired all of Salt Corporation’s outstanding shares on December
31, 2017 for $750,000 cash. Pepper will operate Salt as a wholly owned
subsidiary with a separate legal and accounting identity. Although many of Salt’s
book values approximate fair values, several of its accounts have a fair values that
differ from book values. In addition, Salt has internally developed assets that remain
unrecorded on its books. In deriving the acquisition price, Pepper assessed Salt’s
fair and book value differences as follows:
|
Account |
Book Values |
Fair Values |
|
Patented Technology |
$155,000 |
$237,000 |
|
Customer List |
$0 |
$180,000 |
|
In-process R&D |
$0 |
$200,000 |
|
Machinery |
$105,000 |
$95,000 |
|
Notes Payable |
($50,000) |
($52,000) |
Required: Complete the consolidation worksheet for Pepper and Salt at December 31, 2017.
Problem 3 Consolidation Worksheet
Use entry reference letters (S, A)
|
Consolidation Entries |
|||||
|
Accounts |
Pepper |
Salt |
Dr. |
Cr. |
Consolidation Totals |
|
Cash |
35,000 |
29,000 |
|||
|
Receivables |
150,000 |
65,000 |
|||
|
Investment in Salt |
750,000 |
||||
|
Patented Technology |
400,000 |
155,000 |
|||
|
Customer List |
840,000 |
||||
|
In Process R&D |
|||||
|
Machinery (net) |
320,000 |
105,000 |
|||
|
Goodwill |
|||||
|
Total Assets |
2,495,000 |
354,000 |
|||
|
Accounts Payable |
110,000 |
34,000 |
|||
|
Notes Payable |
370,000 |
50,000 |
|||
|
Common Stock |
460,000 |
50,000 |
|||
|
Additional Paid in Capital |
695,000 |
30,000 |
|||
|
Retained Earnings |
860,000 |
190,000 |
|||
|
Total Liabilities and Equity |
2,495,000 |
354,000 |
|||
In: Accounting