On January 1, 2016, Aronsen Company acquired 80 percent of Siedel Company’s outstanding shares. Siedel had a net book value on that date of $630,000: common stock ($14 par value) of $280,000 and retained earnings of $350,000.

Aronsen paid $640,000 for this investment. The acquisition-date fair value of the 20 percent noncontrolling interest was $160,000. The excess fair value over book value associated with the acquisition was used to increase land by $110,000 and to recognize copyrights (12-year remaining life) at $60,000. Subsequent to the acquisition, Aronsen applied the initial value method to its investment account.

In the 2016–2017 period, the subsidiary’s retained earnings increased by $180,000. During 2018, Siedel earned income of $88,000 while declaring $28,000 in dividends. Also, at the beginning of 2018, Siedel issued 5,000 new shares of common stock for $55 per share to finance the expansion of its corporate facilities. Aronsen purchased none of these additional shares and therefore recorded no entry.

Prepare the appropriate 2018 consolidation entries for these two companies.

PLEASE SHOW ALL WORKS AND STEPS HOW TO GET THE JOURNAL ENTRY NUMBERS. THANK YOU

Background Information: 1 The company started when it acquired $55,000 cash issuing common stock 2 Purchased a new industrial oven that cost $35,000 cash 3 Earned $75,000 in cash revenue 4 Paid $30,000 cash for salaries Expense 5 Adjustment for use of industrial oven. Purchased on January 2 ,2018 with a useful life of 4 years and salvage value of $4,000 Straight-line Depreciation was used of the entry on December 31,2018 a) Compete the accounting equation Goofy Company Accounting Equation Balance Sheet Income Statement Event Assets Accumulated Stockholders Equity Cash + Equipment - Depreciation = Common Stock + Retained Earnings Revenue - Expense = Net Income 1 $55,000 2 (35,000) 3 75,000 4 (30,000) 5 Total $65,000 + $- - $- = $- + $- $- - $- = $- b) What amount of depreciation expense should be reported on the 2018 income statement? c) What amount of accumulated depreciation would be reported on the 2019 Year-End Balance Sheet? Helpful Resources What Are the Main Types of Depreciation Methods? Capital Asset Depreciation - Straight-Line

Pratt Company acquired all of Spider, Inc.’s outstanding shares on December 31, 2018, for $484,900 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:

At December 31, 2018, the following financial information is available for consolidation:

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:

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):

Below are the separate trial balances of Kellogg's and Wholesome at December 31, 2013.

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.

(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).

(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.

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:

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).

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).

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:

At December 31, 2018, the following financial information is available for consolidation:

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Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2018.

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:

At December 31, 2018, the following financial information is available for consolidation:

Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2018.

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:

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):

Below are the separate trial balances of Kellogg's and Wholesome at December 31, 2013.

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.

(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).

(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.

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:

At December 31, 2018, the following financial information is available for consolidation:

Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2018.

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:

At December 31, 2018, the following financial information is available for consolidation:

Prepare a consolidated balance sheet for Pratt and Spider as of December 31, 2018.