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a. Determine the December 31, 2021, consolidated totals for the following accounts: b. In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for the subsidiary? c. If the parent uses the equity method, what consolidation entries would be used on a 2021 worksheet?

a. Determine the December 31, 2021, consolidated totals for the following accounts: b. In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for the subsidiary? c. If the parent uses the equity method, what consolidation entries would be used on a 2021 worksheet?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following are selected accounts and balances for Mergaronite Company and Hill, Inc., as of December 31, 2021. Several of Mergaronite's accounts have been omitted. Credit balances are indicated by parentheses. Dividends were declared and paid in the same period. Revenues Cost of goods sold Depreciation expense Investment income Retained earnings, 1/1/21 Dividends declared Current assets Land Buildings (net) Equipment (net) Liabilities Common stock Additional paid-in capital Assume that Mergaronite acquired Hill on January 1, 2017, by issuing 7,000 shares of common stock having a par value of $10 per share but a fair value of $100 each. On January 1, 2017, Hill's land was undervalued by $18,800, its buildings were overvalued by $31,000, and equipment was undervalued by $61,400. The buildings had a 10-year remaining life; the equipment had a 5-year remaining life. A customer list with an appraised value of $94,000 was developed internally by Hill and was estimated to have a 20- year remaining useful life. a. Determine the December 31, 2021, consolidated totals for the following accounts: b. In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for the subsidiary? c. If the parent uses the equity method, what consolidation entries would be used on a 2021 worksheet? Mergaronite Hill $ (594,000) $ (248,000) 94,000 264,000 108,000 NA 52,000 NA (580,000) (920,000) 134,000 36,000 682,000 84,000 156,000 242,000 (314,000) (40,000) (924,000) Complete this question by entering your answers in the tabs below. Revenues Cost of goods sold Depreciation expense Amortization expense 204,000 312,000 502,000 206,000 (408,000) (304,000) (42,000) Required A Required B Required C Determine the December 31, 2021, consolidated totals for the following accounts: (Input all amounts as positive values.) Consolidated Totals Buildings Equipment Customer list Common stock Additional paid-in capital Consolidated totals B) In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for the subsidiary? C) prepare the SAIDE entries
Transcribed Image Text:The following are selected accounts and balances for Mergaronite Company and Hill, Inc., as of December 31, 2021. Several of Mergaronite's accounts have been omitted. Credit balances are indicated by parentheses. Dividends were declared and paid in the same period. Revenues Cost of goods sold Depreciation expense Investment income Retained earnings, 1/1/21 Dividends declared Current assets Land Buildings (net) Equipment (net) Liabilities Common stock Additional paid-in capital Assume that Mergaronite acquired Hill on January 1, 2017, by issuing 7,000 shares of common stock having a par value of $10 per share but a fair value of $100 each. On January 1, 2017, Hill's land was undervalued by $18,800, its buildings were overvalued by $31,000, and equipment was undervalued by $61,400. The buildings had a 10-year remaining life; the equipment had a 5-year remaining life. A customer list with an appraised value of $94,000 was developed internally by Hill and was estimated to have a 20- year remaining useful life. a. Determine the December 31, 2021, consolidated totals for the following accounts: b. In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for the subsidiary? c. If the parent uses the equity method, what consolidation entries would be used on a 2021 worksheet? Mergaronite Hill $ (594,000) $ (248,000) 94,000 264,000 108,000 NA 52,000 NA (580,000) (920,000) 134,000 36,000 682,000 84,000 156,000 242,000 (314,000) (40,000) (924,000) Complete this question by entering your answers in the tabs below. Revenues Cost of goods sold Depreciation expense Amortization expense 204,000 312,000 502,000 206,000 (408,000) (304,000) (42,000) Required A Required B Required C Determine the December 31, 2021, consolidated totals for the following accounts: (Input all amounts as positive values.) Consolidated Totals Buildings Equipment Customer list Common stock Additional paid-in capital Consolidated totals B) In requirement (a), can the consolidated totals be determined without knowing which method the parent used to account for the subsidiary? C) prepare the SAIDE entries
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