Alpha Company Delta Company Omega Company Consolidated Totals S (900,000) 500,000 294,000 (144,000) $ 500,000) 240,000 $(200,000) $(1.400,000) 627.000 489,250 Sales Cost of goods sold Operating expenses Income of subsidiary 80,000 129,000 (49,000) $ (180,000) 50,000 -0- -0- Separate company net income S (250.000) $ 70.000) $ (283,750) Consolidated net income Net income attributable to noncontrolling interest (Delta Company) Net income attributable to noncontrolling interest (Omega Company) 31,950 18,000 Net income attributable to $ (233.800) $ (572,400) (233,800) 50,000 Alpha Company Retained earnings, 1/1/18 Net income (above) Dividends declared $ (600,000) (250,000) 50,000 $ (400,000) (180,000) $(100.000) (70,000) 50,000 40,000 $ (800,000) $ 262,000 $ 540,000) $ 206,000 Retained earnings, 12/31/18 $(120,000) $ (756.200) $ 70,000 160,000 -0- $ 538,000 738,000 -0- Cash and receivables Inventory. Investment in Delta Company 290,000 310,000 -0- 628,000 Investment in Omega Company Property, plant, and equipment Copyrights -0- 420,000 238,000 316,000 -0- -0- 1,006,000 270,000 -0- -0- 206,250 $ 1,600,000 $ (600,000) (200,000) (800,000) $ 1,070,000 $ (410,000) (120,000) (540,000) Total assets $ 500,000 $ 2,488,250 $280,000) (100,000) (120,000) $(1,290,000) (200,000) (756,200) Liabilities . Common stock Retained earnings, 12/31/18 Noncontrolling interest in Delta Company, 12/31/18 Noncontrolling interest In Omega Company, 12/31/18 Total liabilities and equities. -0- -0- -0- (146,050) -0- -0- (96,000) $(2.488.250) -0- $(1,600,000) $(1.070,000) $500,000)

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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Question

On January 1, 2016, Alpha acquired 80 percent of Delta. Of Delta’s total business fair value, $125,000 was allocated to copyrights with a 20-year remaining life. Subsequently, on January 1, 2017, Delta obtained 70 percent of Omega’s outstanding voting shares. In this second acquisition, $120,000 of Omega’s total business fair value was assigned to copyrights that had a remaining life of 12 years. Delta’s book value was $490,000 on January 1, 2016, and Omega reported a book value of $140,000 on January 1, 2017.
Delta has made numerous inventory transfers to Alpha since the business combination was formed. Intra-entity gross profits of $15,000 were present in Alpha’s inventory as of January 1, 2018. During the year, $200,000 in additional intra-entity sales were made with $22,000 in Intra-entity gross profits in inventory remaining at the end of the period.
Both Alpha and Delta utilized the partial equity method to account for their investment balances.
Following are the individual financial statements for the companies for 2018 with consolidated totals. Develop the worksheet entries necessary to derive these reported balances:

Alpha
Company
Delta
Company
Omega
Company
Consolidated
Totals
S (900,000)
500,000
294,000
(144,000)
$ 500,000)
240,000
$(200,000)
$(1.400,000)
627.000
489,250
Sales
Cost of goods sold
Operating expenses
Income of subsidiary
80,000
129,000
(49,000)
$ (180,000)
50,000
-0-
-0-
Separate company net income
S (250.000)
$ 70.000)
$ (283,750)
Consolidated net income
Net income attributable to noncontrolling
interest (Delta Company)
Net income attributable to noncontrolling
interest (Omega Company)
31,950
18,000
Net income attributable to
$ (233.800)
$ (572,400)
(233,800)
50,000
Alpha Company
Retained earnings, 1/1/18
Net income (above)
Dividends declared
$ (600,000)
(250,000)
50,000
$ (400,000)
(180,000)
$(100.000)
(70,000)
50,000
40,000
$ (800,000)
$ 262,000
$ 540,000)
$ 206,000
Retained earnings, 12/31/18
$(120,000)
$ (756.200)
$ 70,000
160,000
-0-
$ 538,000
738,000
-0-
Cash and receivables
Inventory.
Investment in Delta Company
290,000
310,000
-0-
628,000
Investment in Omega Company
Property, plant, and equipment
Copyrights
-0-
420,000
238,000
316,000
-0-
-0-
1,006,000
270,000
-0-
-0-
206,250
$ 1,600,000
$ (600,000)
(200,000)
(800,000)
$ 1,070,000
$ (410,000)
(120,000)
(540,000)
Total assets
$ 500,000
$ 2,488,250
$280,000)
(100,000)
(120,000)
$(1,290,000)
(200,000)
(756,200)
Liabilities .
Common stock
Retained earnings, 12/31/18
Noncontrolling interest
in Delta Company, 12/31/18
Noncontrolling interest
In Omega Company, 12/31/18
Total liabilities and equities.
-0-
-0-
-0-
(146,050)
-0-
-0-
(96,000)
$(2.488.250)
-0-
$(1,600,000)
$(1.070,000)
$500,000)

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