Required A Required BDetermine the consolidated balances for this business combination as of December 31, 2021. (For accounts where multiple consolidationentries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combineall credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.)Show less AAccountsRevenuesCost of goods soldDepreciation expenseAmortization expenseInterest expenseEquity in income of San MarcoSeparate company net incomeConsolidated net incomeTo noncontrolling interestTo Paloma CompanyRetained earnings, 1/1Net incomeDividends declaredRetained earnings, 12/31Current assetsInvestment in San MarcoCustomer baseBuildings and equipmentCopyrightsGoodwillTotal assetsAccounts payableNotes payableNCI in San MarcoCommon stockAdditional paid-in capitalRetained earnings, 12/31Total liabilities and equitiesPaloma$(1,843,000)1,100,000PALOMA CORPORATION AND SAN MARCO COMPANYConsolidation WorksheetFor Year Ending December 31, 2021San Marco$$125,000275,00027,500(121,500)$ (437,000) S (215,000)(2,625,000)(437,000)350,000(2,712,000)0$S$ 1,204,000 $1,854,000931,000950,000(900,000)(300,000)(2,712,000)(4,939,000)S (395,000)(215,000)25,000(585,000)$$ 4,939,000 S$ (485,000) S(542,000)(675,000)322,000120,00011,0007.0000430,00000863,000107,0001,400,000(200,000)(155,000)(400,000)(60,000)(585,000)S (1,400,000)Consolidation EntriesDebitCreditNoncontrolling ConsolidatedTotalsInterest On January 1, 2020, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the outstanding voting stock of San MarcoCompany. The consideration transferred by Paloma provided a reasonable basis for assessing the total January 1, 2020, fair value ofSan Marco Company. At the acquisition date, San Marco reported the following owners' equity amounts in its balance sheet:Common stockAdditional paid-in capitalRetained earningsIn determining its acquisition offer, Paloma noted that the values for San Marco's recorded assets and liabilities approximated their fairvalues. Paloma also observed that San Marco had developed internally a customer base with an assessed fair value of $800,000 thatwas not reflected on San Marco's books. Paloma expected both cost and revenue synergies from the combination.At the acquisition date, Paloma prepared the following fair-value allocation schedule:Fair value of San Marco CompanyBook value of San Marco CompanyExcess fair valueto customer base (10-year remaining life)to goodwillRevenuesCost of goods soldDepreciation expenseAmortization expenseInterest expenseEquity in income of San MarcoNet incomeRetained earnings, 1/1Net incomeDividends declaredRetained earnings, 12/31$400,00060,000265,000At December 31, 2021, the two companies report the following balances:Current assetsInvestment in San MarcoBuildings and equipmentCopyrightsTotal assetsAccounts payableNotes payableCommon stockAdditional paid-in capitalRetained earnings, 12/31Total liabilities and equities$ 1,900,000725,0001,175,000800,000375,000$Paloma$ (1,843,000)1,100,000San Marco$ (675,000)322,000120,00011,0007,0000125,000275,00027,500(121,500)$ (437,000) $ (215,000)$ (2,625,000) $(437,000)350,000(395,000)(215,000)25,000$ (2,712,000) $ (585,000)$ 1,204,000430,0001,854,000863,000931,000950,000197,000$ 4,939,000 $ 1,400,000$ (485,000) $(542,000)(900,000)(300,000)(2,712,000)$ (4,939,000)At year-end, there were no intra-entity receivables or payables.(200,000)(155,000)(400,000)(60,000)(585,000)$(1,400,000)a. Determine the consolidated balances for this business combination as of December 31, 2021.b. If instead the noncontrolling interest's acquisition-date fair value is assessed at $167,500, what changes would be evident in theconsolidated statements?

Generally, a company produces a single financial statement, but when a company has subsidiaries, it…

entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Sir ill credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive va evenues Accounts ost of goods sold epreciation expense mortization expense terest expense quity in income of San Marco eparate company net income onsolidated net income noncontrolling interest Paloma Company PALOMA CORPORATION AND SAN MARCO COMPANY Consolidation Worksheet For Year Ending December 31, 2021 Paloma $ (1.843,000) 1,100,000 125,000 275,000 27,500 S San Marco (675,000) 322,000 120,000 11,000 7.000 o (121,500) $ (437,000) $ (215,000) Consolidation Entries Debit Credit Noncontrolling Consolidated Interest Totals

entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Sir ill credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive va evenues Accounts ost of goods sold epreciation expense mortization expense terest expense quity in income of San Marco eparate company net income onsolidated net income noncontrolling interest Paloma Company PALOMA CORPORATION AND SAN MARCO COMPANY Consolidation Worksheet For Year Ending December 31, 2021 Paloma $ (1.843,000) 1,100,000 125,000 275,000 27,500 S San Marco (675,000) 322,000 120,000 11,000 7.000 o (121,500) $ (437,000) $ (215,000) Consolidation Entries Debit Credit Noncontrolling Consolidated Interest Totals

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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