a. Prepare the Value Analysis table and the Determination and Distribution of Excess schedule table. b. Prepare all the eliminations and adjustments that would be made on the 2020 consolidated worksheet. c. Prepare the Income Distribution Schedules for Subsidiary and Parent. Answer a,b,c.if answered within 40mins,it would be appreciable!!
Accounting
On January 1, 2020, Parent Company purchased 80% of the common stock of Subsidiary Company for $320,000.
- On this date, Subsidiary had common stock, other paid-in capital, and
retained earnings of $40,000, $120,000, and $190,000, respectively. - Net income and dividends for Subsidiary Company were $50,000 and $10,000, respectively.
- Parent Company has used the simple equity method for recording the Subsidiary income and dividends.
- On January 1, 2020, the only tangible assets of Subsidiary that were undervalued were inventory and equipment. Inventory was worth $5,000 more than cost. Equipment, which was worth $15,000 more than book value, has a remaining life of 5 years, and straight-line
depreciation is used. Any remaining excess isgoodwill .
The following
|
Parent |
Subsidiary |
|
|
Investment in Sub |
352,000 |
|
|
Current Assets |
132,000 |
180,000 |
|
Inventory |
60,000 |
40,000 |
|
Equipment |
350,000 |
300,000 |
|
|
(120,000) |
(50,000) |
|
Goodwill |
||
|
Bond Payable |
(134,000) |
(80,000) |
|
CS-Par |
(100,000) |
|
|
PIC-Par |
(200,000) |
|
|
RE-Par |
(200,000) |
|
|
CS-Sub |
(40,000) |
|
|
PIC-Sub |
(120,000) |
|
|
RE-Sub |
(190,000) |
|
|
Sales |
(550,000) |
(400,000) |
|
Expense |
450,000 |
350,000 |
|
Depreciation Expense |
||
|
Sub Income |
(40,000) |
|
|
Dividend Declared - Sub |
10,000 |
|
|
Totals |
0 |
0 |
a. Prepare the Value Analysis table and the Determination and Distribution of Excess schedule table.
b. Prepare all the eliminations and adjustments that would be made on the 2020 consolidated worksheet.
c. Prepare the Income Distribution Schedules for Subsidiary and Parent.
Answer a,b,c.if answered within 40mins,it would be appreciable!!
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