Following are financial statements for Moore Company and Kirby Company for 2021: Moore $ (800,000) 500,000 100,000 Kirby $(600,000) 400,000 160,000 Sales Cost of goods sold Operating and interest expenses Net income 2$ (200,000) 2$ (40,000) Retained earnings, 1/1/21 Net income $ (990,000) (200,000) 130,000 (550,000) (40,000) $ Dividends declared Retained earnings, 12/31/21 $(1,060,000) 2$ (590,000) 217,000 224,000 657,000 600,000 1,000,000 (100,000) 200,000 $ 2,798,000 Cash and receivables $ $ 180,000 Inventory Investment in Kirby Equipment (net) Buildings Accumulated depreciation-buildings Other assets 160,000 420,000 650,000 (200,000) 100,000 Total assets $ 1,310,000 $(1,138,000) (600,000) (1,060,000) $(2,798,000) Liabilities (570,000) 2$ (150,000) (590,000) Common stock Retained earnings, 12/31/21 Total liabilities and equity $(1,310,000) (Note: Parentheses indicate a credit balance.) • Moore purchased 90 percent of Kirby on January 1, 2020, for $657,000 in cash. On that date, the 10 percent noncontrolling interest was assessed to have a $73,000 fair value. Also at the acquisition date, Kirby held equipment (four-year remaining life) undervalued in its financial records by $20,000 and interest-bearing liabilities (five-year remaining life) overvalued by $40,000. The rest of the excess fair over book value was assigned to previously unrecognized brand names and amortized over a 10-year life. • During 2020, Kirby reported a net income of $80,000 and declared no dividends. • Each year, Kirby sells Moore inventory at a 20 percent gross profit rate. Intra-entity sales were $145,000 in 2020 and $160,000 in 2021. On January 1, 2021, 30 percent of the 2020 transfers were still on hand, and on December 31, 2021, 40 percent of the 2021 transfers remained. • Moore sold Kirby a building on January 2, 2020. It had cost Moore $100,000 but had $90,000 in accumulated depreciation at the time of this transfer. The price was $25,000 in cash. At that time, the building had a five-year remaining life. Determine all consolidated balances computationally. (Input all amounts as positive values.)

Following are financial statements for Moore Company and Kirby Company for 2021: Moore $ (800,000) 500,000 100,000 Kirby $(600,000) 400,000 160,000 Sales Cost of goods sold Operating and interest expenses Net income 2$ (200,000) 2$ (40,000) Retained earnings, 1/1/21 Net income $ (990,000) (200,000) 130,000 (550,000) (40,000) $ Dividends declared Retained earnings, 12/31/21 $(1,060,000) 2$ (590,000) 217,000 224,000 657,000 600,000 1,000,000 (100,000) 200,000 $ 2,798,000 Cash and receivables $ $ 180,000 Inventory Investment in Kirby Equipment (net) Buildings Accumulated depreciation-buildings Other assets 160,000 420,000 650,000 (200,000) 100,000 Total assets $ 1,310,000 $(1,138,000) (600,000) (1,060,000) $(2,798,000) Liabilities (570,000) 2$ (150,000) (590,000) Common stock Retained earnings, 12/31/21 Total liabilities and equity $(1,310,000) (Note: Parentheses indicate a credit balance.) • Moore purchased 90 percent of Kirby on January 1, 2020, for $657,000 in cash. On that date, the 10 percent noncontrolling interest was assessed to have a $73,000 fair value. Also at the acquisition date, Kirby held equipment (four-year remaining life) undervalued in its financial records by $20,000 and interest-bearing liabilities (five-year remaining life) overvalued by $40,000. The rest of the excess fair over book value was assigned to previously unrecognized brand names and amortized over a 10-year life. • During 2020, Kirby reported a net income of $80,000 and declared no dividends. • Each year, Kirby sells Moore inventory at a 20 percent gross profit rate. Intra-entity sales were $145,000 in 2020 and $160,000 in 2021. On January 1, 2021, 30 percent of the 2020 transfers were still on hand, and on December 31, 2021, 40 percent of the 2021 transfers remained. • Moore sold Kirby a building on January 2, 2020. It had cost Moore $100,000 but had $90,000 in accumulated depreciation at the time of this transfer. The price was $25,000 in cash. At that time, the building had a five-year remaining life. Determine all consolidated balances computationally. (Input all amounts as positive values.)

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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Transcribed Image Text:Following are financial statements for Moore Company and Kirby Company for 2021: Kirby (600,000) 400,000 Moore ( 800,000) 500,000 100,000 ( 200,000) Sales $ Cost of goods sold Operating and interest expenses 160,000 ( 40,000) Net income 2$ $ (990,000) (200,000) 130,000 Retained earnings, 1/1/21 $ (550,000) ( 40,000) Net income Dividends declared Retained earnings, 12/31/21 $(1,060,000) (590,000) Cash and receivables $ 217,000 224,000 657,000 180,000 160,000 Inventory Investment in Kirby Equipment (net) Buildings Accumulated depreciation-buildings 600,000 1,000,000 (100,000) 200,000 $ 2,798,000 420,000 650,000 (200,000) 100,000 $ 1,310,000 Other assets Total assets $(1,138,000) (600,000) (1,060,000) $(570,000) (150,000) (590,000) Liabilities Common stock Retained earnings, 12/31/21 Total liabilities and equity $(2,798,000) $(1,310,000) (Note: Parentheses indicate a credit balance.) • Moore purchased 90 percent of Kirby on January 1, 2020, for $657,000 in cash. On that date, the 10 percent noncontrolling interest was assessed to have a $73,000 fair value. Also at the acquisition date, Kirby held equipment (four-year remaining life) undervalued in its financial records by $20,000 and interest-bearing liabilities (five-year remaining life) overvalued by $40,000. The rest of the excess fair over book value was assigned to previously unrecognized brand names and amortized over a 10-year life. • During 2020, Kirby reported a net income of $80,000 and declared no dividends. • Each year, Kirby sells Moore inventory at a 20 percent gross profit rate. Intra-entity sales were $145,000 in 2020 and $160,000 in 2021. On January 1, 2021, 30 percent of the 2020 transfers were still on hand, and on December 31, 2021, 40 percent of the 2021 transfers remained. • Moore sold Kirby a building on January 2, 2020. It had cost Moore $100,000 but had $90,000 in accumulated depreciation at the time of this transfer. The price was $25,000 in cash. At that time, the building had a five-year remaining life. Determine all consolidated balances computationally. (Input all amounts as positive values.)

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