Allison Corporation acquired 90 percent of Bretton on January 1, 2019. Of Bretton's total acquisition-date fair value, $60,000 was allocated to undervalued equipment (with a 10-year remaining life) and $80,000 was attributed to franchises (to be written off over a 20-year period). Since the takeover, Bretton has transferred inventory to its parent as follows: Transfer Price Year Cost 2019 $45,000 $90,000 $ 2020 48,000 80,000 2021 69,000 92,000 Remaining at Year-End 30,000 (at transfer price) 35,000 (at transfer price) 50,000 (at transfer price) On January 1, 2020, Allison sold Bretton a building for $50,000 that had originally cost $70,000 but had only a $30,000 book value at the date of transfer. The building is estimated to have a five-year remaining life (straight-line depreciation is used with no salvage value). Selected figures from the December 31, 2021, trial balances of these two companies are as follows: Sales Cost of goods sold Operating expenses Investment income Inventory Equipment (net) Buildings (net) Allison $ 700,000 440,000 120,000 Not given 210,000 140,000 350,000 Bretton $ 400,000 220,000 80,000 0 90,000 110,000 190,000 Determine consolidated totals for each of these account balances.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Allison Corporation acquired 90 percent of Bretton on January 1, 2019. Of Bretton's total acquisition-date fair value, $60,000 was
allocated to undervalued equipment (with a 10-year remaining life) and $80,000 was attributed to franchises (to be written off over a
20-year period).
Since the takeover, Bretton has transferred inventory to its parent as follows:
Transfer
Price
Year Cost
2019 $45,000 $90,000 $
2020 48,000 80,000
2021 69,000 92,000
Remaining at Year-End
30,000 (at transfer price)
35,000 (at transfer price)
50,000 (at transfer price)
On January 1, 2020, Allison sold Bretton a building for $50,000 that had originally cost $70,000 but had only a $30,000 book value at
the date of transfer. The building is estimated to have a five-year remaining life (straight-line depreciation is used with no salvage
value).
Selected figures from the December 31, 2021, trial balances of these two companies are as follows:
Sales
Cost of goods sold
Operating expenses
Investment income
Inventory
Equipment (net)
Buildings (net)
Allison
$ 700,000
440,000
120,000
Not given
210,000
140,000
350,000
Bretton
$ 400,000
220,000
80,000
0
90,000
110,000
190,000
Determine consolidated totals for each of these account balances.
Transcribed Image Text:Allison Corporation acquired 90 percent of Bretton on January 1, 2019. Of Bretton's total acquisition-date fair value, $60,000 was allocated to undervalued equipment (with a 10-year remaining life) and $80,000 was attributed to franchises (to be written off over a 20-year period). Since the takeover, Bretton has transferred inventory to its parent as follows: Transfer Price Year Cost 2019 $45,000 $90,000 $ 2020 48,000 80,000 2021 69,000 92,000 Remaining at Year-End 30,000 (at transfer price) 35,000 (at transfer price) 50,000 (at transfer price) On January 1, 2020, Allison sold Bretton a building for $50,000 that had originally cost $70,000 but had only a $30,000 book value at the date of transfer. The building is estimated to have a five-year remaining life (straight-line depreciation is used with no salvage value). Selected figures from the December 31, 2021, trial balances of these two companies are as follows: Sales Cost of goods sold Operating expenses Investment income Inventory Equipment (net) Buildings (net) Allison $ 700,000 440,000 120,000 Not given 210,000 140,000 350,000 Bretton $ 400,000 220,000 80,000 0 90,000 110,000 190,000 Determine consolidated totals for each of these account balances.
Sales
Cost of goods sold
Operating expenses
Investment income
Inventory
Equipment (net)
Buildings (net)
Consolidated
Totals
Transcribed Image Text:Sales Cost of goods sold Operating expenses Investment income Inventory Equipment (net) Buildings (net) Consolidated Totals
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 2 images

Blurred answer
Knowledge Booster
Accounting for Intangible assets
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education