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 Year Cost Price 2019 $ 45,000 $90,000 2020 48,000 80,000 2021 69,000 92,000 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: Bretton $ 400,000 220,000 80,000 0 90,000 110,000 190,000 Sales Cost of goods sold Operating expenses Investment income Inventory Remaining at Year-End 30,000 (at transfer price) 35,000 (at transfer price) 50,000 (at transfer price) Equipment (net) Buildings (net) Allison $ 700,000 440,000 120,000 Not given 210,000 140,000 350,000 Determine consolidated totals for each of these account balances. Consolidated Totals
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 Year Cost Price 2019 $ 45,000 $90,000 2020 48,000 80,000 2021 69,000 92,000 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: Bretton $ 400,000 220,000 80,000 0 90,000 110,000 190,000 Sales Cost of goods sold Operating expenses Investment income Inventory Remaining at Year-End 30,000 (at transfer price) 35,000 (at transfer price) 50,000 (at transfer price) Equipment (net) Buildings (net) Allison $ 700,000 440,000 120,000 Not given 210,000 140,000 350,000 Determine consolidated totals for each of these account balances. Consolidated Totals
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
Sales
Cost of goods sold
Operating expenses
Investment income.
Inventory
Equipment (net)
Buildings (net)
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
Remaining at Year-End
30,000 (at transfer price)
35,000 (at transfer price)
50,000 (at transfer price)
Inventory
Equipment (net)
Buildings (net)
Allison
$ 700,000
440,000
120,000
Not given
210,000
140,000
350,000
J
Bretton
$400,000
220,000
80,000
0
Determine consolidated totals for each of these account balances.
90,000
110,000
190,000
Consolidated
Totals
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