Tyler Company acquired all of Jasmine Company’s outstanding stock on January 1, 2022, for $274,700 in cash. Jasmine had a book value of only $204,900 on that date. However, equipment (having an eight-year remaining life) was undervalued by $71,200 on Jasmine’s financial records. A building with a 20-year remaining life was overvalued by $15,400. Subsequent to the acquisition, Jasmine reported the following:YearNet IncomeDividends Declared2022$ 73,800$ 10,000202374,50040,000202439,00020,000In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these two companies as of December 31, 2024, follow:AccountsTyler CompanyJasmine CompanyRevenues—operating$ (430,000)$ (195,000)Expenses215,000156,000Equipment (net)462,00097,500Buildings (net)340,00093,600Common stock(290,000)(64,500)Retained earnings, 12/31/24(446,000)(225,000)Required:Determine the following account balances as of December 31, 2024:Goodwill (net) a. Investment in Jasmine Companyb. Equity in Subsidiary Earningsc. Consolidated Net Incomed. Consolidated Equipment (net)e. Consolidated Buildings (net)f. Consolidated Goodwill (net)g. Consolidated Common Stockh. Consolidated Retained Earnings, 12/31/24$69Amounts367,61069$30,87069$ 245,870$ 604,000$420,5106969$290,000$ 446,000

Step 1: Computation of the amount of investment in Jasmine Company: Purchase consideration…

a. Investment in Jasmine Company b. Equity in Subsidiary Earnings c. Consolidated Net Income d. Consolidated Equipment (net) e. Consolidated Buildings (net) f. Consolidated Goodwill (net) g. Consolidated Common Stock h. Consolidated Retained Earnings, 12/31/24 $ 69 Amounts 367,610 69 $ 30,870 69 $ 245,870 $ 604,000 $ 420,510 69 69 $ 290,000 $ 446,000

a. Investment in Jasmine Company b. Equity in Subsidiary Earnings c. Consolidated Net Income d. Consolidated Equipment (net) e. Consolidated Buildings (net) f. Consolidated Goodwill (net) g. Consolidated Common Stock h. Consolidated Retained Earnings, 12/31/24 $ 69 Amounts 367,610 69 $ 30,870 69 $ 245,870 $ 604,000 $ 420,510 69 69 $ 290,000 $ 446,000

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter17: Financial Statement Analysis

Section17.4: Analyzing Financial Statements Using Financial Ratios

Problem 1WT

See similar textbooks

Year	Net Income	Dividends Declared
2022	$ 73,800	$ 10,000
2023	74,500	40,000
2024	39,000	20,000

Accounts	Tyler Company	Jasmine Company
Revenues—operating	$ (430,000)	$ (195,000)
Expenses	215,000	156,000
Equipment (net)	462,000	97,500
Buildings (net)	340,000	93,600
Common stock	(290,000)	(64,500)
Retained earnings, 12/31/24	(446,000)	(225,000)

Required:

Determine the following account balances as of December 31, 2024:

Goodwill (net)

a. Investment in Jasmine Company
b. Equity in Subsidiary Earnings
c. Consolidated Net Income
d. Consolidated Equipment (net)
e. Consolidated Buildings (net)
f. Consolidated Goodwill (net)
g. Consolidated Common Stock
h. Consolidated Retained Earnings, 12/31/24
$
69
Amounts
367,610
69
$
30,870
69
$ 245,870
$ 604,000
$
420,510
69
69
$
290,000
$ 446,000

Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Determine: 1. The Profit Attributable to Equity Holders of Parent/ Controlling Interest (Parent's Interests) in Consolidated Net Income for 20x4 2. The Non-Controlling Interest in Net Income for 20x4 3. The Consolidated/Group Net Income for 20x4 4. The Consolidated Retained Earnings, December 31,20x4 5. The Consolidated Sales for 20x4 6. The Consolidated Cost of Sales for 20x4 7. The Consolidated Gross Profit for 20x4
Putt Corporation acquired 70 percent of Slice Company's voting common stock on January 1, 20X3, for $158,900. Slice reported common stock outstanding of $100,000 and retained earnings of $85,000. The fair value of the noncontrolling interest was $68,100 at the date of acquisition. Buildings and equipment held by Slice had a fair value $25,000 higher than book value. The remainder of the differential was assigned to a copyright held by Slice. Buildings and equipment had a 10-year remaining life and the copyright had a 5- year life at the date of acquisition. Trial balances for Putt and Slice on December 31, 20X5, are as follows: Putt Corporation Slice Company Debit Credit Debit Credit Cash $ 15,850 $ 58,000 Accounts Receivable 65,000 70,000 Interest & Other Receivables 30,000 10,000 Inventory 150,000 180,000 Land 80,000 60,000 Buildings & Equipment 315,000 240,000 Bond Discount 15,000 Investment in Slice Company 157,630 Cost of Goods Sold 375,000 110,000 Depreciation Expense 25,000…
What is the net increase or (net decrease) in the identifiable assets of SD Corporation?a. 13,700,500b. 13,307,500c. 13,957,500d. 13,050,500
B1-51 Preparing a consolidated balance sheet Obj. 4 Pryor Corp. owns 100% of the common stock of Stark Inc. Pryor Corp.'s investment in Stark Inc. is recorded in its ledger as "Investment in Stark Inc." with a debit balance of $11,150,000. The stockholders' equity of Pryor Corp. and Stark Inc. for the year ending December 31, 20Y6, is as follows: Common stock Retained earnings Pryor Corp. $ 12,000,000 125,000,000 Stark Inc. $2,500,000 8,650,000 a. Prepare the elimination entry that would be made in the spreadsheet for preparing the consoli- dated balance sheet. b. Show how the stockholders' equity of Pryor Corp. and Subsidiary would be reported on the consolidated balance sheet.
The balance sheets of Kim Ltd. and Steinbach Co. on December 31, Year 2, just before the transaction described below, were as follows: Cash and receivables Inventory Property and equipment (net) Current liabilities Long-term debt Common shares Retained earnings No On December 31, Year 2, Kim purchased 60% of Steinbach's outstanding common shares for $144,000 in cash. Coincidentally, the carrying amounts of Steinbach's assets and liabilities were equal to fair value. A Required: (a) Prepare the journal entries, if any, for Kim Ltd. and for Steinbach Co. to record this transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) B S.No 1 2 Assets Cash and receivables Cash Kim $365,000 Liabilities and Equity Current liabilities Long-term debt Retained earnings 160,000 193,000 $ 718,000 $ 138,000 317,000 100,000 163,000 $ 718,000 Cash Inventory Property and equipment (net) Investment in Steinbach Common shares Investment in…
Consider the following premerger information about Firm X and Firm Y: 222 Total earnings Shares outstanding Per-share values: Market Book Firm X $92,000 49,000 Assets from X Assets from Y Goodwill Total Assets XY LA GA Firm Y $20,500 14,000 49 $ 18 $ 20 7 zursurch of M www.am entrat human pa grawe anakmuom 2 Hoe o Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $7 per share, and that neither firm has any debt before or after the merger. Construct the postmerger balance sheet for Firm X assuming the use of the purchase accounting method. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)
How much is the consolidated total assets on January 1, 20x1? How much is the consolidated total equity on January 1, 20x1?
Using the partially completed worksheet below, calculate the amount of the consolidated closing balance of retained earnings? Net profit Retained earnings - opening Dividend declared Dividend paid Retained earnings - closing $496,450 $500,200 O $506,450 O $516,450 Parent Subsidiary Adjustment Adjustment Consolidated 198,000 58,000 6,000 16,000 230,000 73,000 3,000 7,500 226,000 291,500 DR 5,800 CR 3,250 3,000 7,500 400,000 ?
What is the profit attributable to equity holders of parent (or controlling interest in consolidated net income) on December 31?A. P 26,600 C. P 36,000B. P32,090 D. P 44,100
Exercise 6-13 (Algo) Consolidated Balance Sheet Worksheet LO 6-3, 6-4 The December 31, 20x8, balance sheets for Pint Corporation and its 70 percent-owned subsidiery Saloon Company contained the following summarized amounts Assets Cash and Receivables Inventory Buildings and Equipment (net) Investment in Saloon Company Total Assets S PINT CORPORATION AND SALOON COMPANY Balance Sheets December 31, 20x8 Liabilities and Equity Accounts Payable Common Stock Retained Earnings Total Liabilities and Equity view transaction list Consolidation Worksheet Entries
Do not use negative signs with your answers below. Reconciliation of Cost to Equity Method Parent's pre-consolidation net income 401000 v Dividend Income 81000 v P% x Net income of subsidiary P% x AAP amortization 0 x Net income attributable to controlling interest $ 0 x b. Prepare the consolidated income statement for the current year. Do not use negative signs with your answers below. Consolidated Income Statement Sales $ 12200000 v Cost of goods sold 8120000 v Gross profit 4080000 v Operating expenses 0 x Net income Net income attributable to noncontrolling interests 0 x Net income 0 x
Describe how, despite the fact they include different accounts, conceptually, the [C] entry under the equity method of pre-consolidation bookkeeping is the same as the [C] entry under the cost method of pre-consolidation bookkeeping.