House Corporation has been operating profitably since its creation in 1960. At the beginning of 2016, House acquired a 70 percent ownership in Wilson Company. At the acquisition date, House prepared the following fair-value allocation schedule: Consideration transferred for 70% interest in Wilson $ 707,000 Fair value of the 30% noncontrolling interest 303,000 Wilson business fair value $ 1,010,000 Wilson book value 790,000 Excess fair value over book value $ 220,000 Assignments to adjust Wilson’s assets to fair value: To buildings (20-year remaining life) $ 60,000 To equipment (4-year remaining life) (20,000 ) To franchises (10-year remaining life) 40,000 80,000 To goodwill (indefinite life) $ 140,000 House regularly buys inventory from Wilson at a markup of 25 percent more than cost. House's purchases during 2016 and 2017 and related ending inventory balances follow: Year Intra-Entity Purchases Remaining Intra-Entity Inventory— End of Year (at transfer price) 2016 $120,000 $40,000 2017 150,000 60,000 On January 1, 2018, House and Wilson acted together as co-acquirers of 80 percent of Cuddy Company's outstanding common stock. The total price of these shares was $240,000, indicating neither goodwill nor other specific fair-value allocations. Each company put up one-half of the consideration transferred. During 2018, House acquired additional inventory from Wilson at a price of $200,000. Of this merchandise, 45 percent is still held at year-end. Using the three companies' following financial records for 2018, prepare a consolidation worksheet. The partial equity method based on separate company incomes has been applied to each investment. PLEASE SHOW ME WORKSHEET HOW YOU GET THE FINAL NUMBERS. TRULY APPRECIATE YOU SMART PPL. House Corporation Wilson Company Cuddy Company Sales and other revenues $ (900,000 ) $ (700,000 ) $ (300,000 ) Cost of goods sold 551,000 300,000 140,000 Operating expenses 219,000 270,000 90,000 Income of Wilson Company (91,000 ) 0 0 Income of Cuddy Company (28,000 ) (28,000 ) 0 Net income $ (249,000 ) $ (158,000 ) $ (70,000 ) Retained earnings, 1/1/18 $ (820,000 ) $ (590,000 ) $ (150,000 ) Net income (above) (249,000 ) (158,000 ) (70,000 ) Dividends declared 100,000 96,000 50,000 Retained earnings, 12/31/18 $ (969,000 ) $ (652,000 ) $ (170,000 ) Cash and receivables $ 220,000 $ 334,000 $ 67,000 Inventory 390,200 320,000 103,000 Investment in Wilson Company 807,800 0 0 Investment in Cuddy Company 128,000 128,000 0 Buildings 385,000 320,000 144,000 Equipment 310,000 130,000 88,000 Land 180,000 300,000 16,000 Total assets $ 2,421,000 $ 1,532,000 $ 418,000 Liabilities $ (632,000 ) $ (570,000 ) $ (98,000 ) Common stock (820,000 ) (310,000 ) (150,000 ) Retained earnings, 12/31/18 (969,000 ) (652,000 ) (170,000 ) Total liabilities and equities $ (2,421,000 ) $ (1,532,000 ) $ (418,000 )

House Corporation has been operating profitably since its creation in 1960. At the beginning of 2016, House acquired a 70 percent ownership in Wilson Company. At the acquisition date, House prepared the following fair-value allocation schedule: Consideration transferred for 70% interest in Wilson $ 707,000 Fair value of the 30% noncontrolling interest 303,000 Wilson business fair value $ 1,010,000 Wilson book value 790,000 Excess fair value over book value $ 220,000 Assignments to adjust Wilson’s assets to fair value: To buildings (20-year remaining life) $ 60,000 To equipment (4-year remaining life) (20,000 ) To franchises (10-year remaining life) 40,000 80,000 To goodwill (indefinite life) $ 140,000 House regularly buys inventory from Wilson at a markup of 25 percent more than cost. House's purchases during 2016 and 2017 and related ending inventory balances follow: Year Intra-Entity Purchases Remaining Intra-Entity Inventory— End of Year (at transfer price) 2016 $120,000 $40,000 2017 150,000 60,000 On January 1, 2018, House and Wilson acted together as co-acquirers of 80 percent of Cuddy Company's outstanding common stock. The total price of these shares was $240,000, indicating neither goodwill nor other specific fair-value allocations. Each company put up one-half of the consideration transferred. During 2018, House acquired additional inventory from Wilson at a price of $200,000. Of this merchandise, 45 percent is still held at year-end. Using the three companies' following financial records for 2018, prepare a consolidation worksheet. The partial equity method based on separate company incomes has been applied to each investment. PLEASE SHOW ME WORKSHEET HOW YOU GET THE FINAL NUMBERS. TRULY APPRECIATE YOU SMART PPL. House Corporation Wilson Company Cuddy Company Sales and other revenues $ (900,000 ) $ (700,000 ) $ (300,000 ) Cost of goods sold 551,000 300,000 140,000 Operating expenses 219,000 270,000 90,000 Income of Wilson Company (91,000 ) 0 0 Income of Cuddy Company (28,000 ) (28,000 ) 0 Net income $ (249,000 ) $ (158,000 ) $ (70,000 ) Retained earnings, 1/1/18 $ (820,000 ) $ (590,000 ) $ (150,000 ) Net income (above) (249,000 ) (158,000 ) (70,000 ) Dividends declared 100,000 96,000 50,000 Retained earnings, 12/31/18 $ (969,000 ) $ (652,000 ) $ (170,000 ) Cash and receivables $ 220,000 $ 334,000 $ 67,000 Inventory 390,200 320,000 103,000 Investment in Wilson Company 807,800 0 0 Investment in Cuddy Company 128,000 128,000 0 Buildings 385,000 320,000 144,000 Equipment 310,000 130,000 88,000 Land 180,000 300,000 16,000 Total assets $ 2,421,000 $ 1,532,000 $ 418,000 Liabilities $ (632,000 ) $ (570,000 ) $ (98,000 ) Common stock (820,000 ) (310,000 ) (150,000 ) Retained earnings, 12/31/18 (969,000 ) (652,000 ) (170,000 ) Total liabilities and equities $ (2,421,000 ) $ (1,532,000 ) $ (418,000 )

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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Consideration transferred for 70% interest in Wilson				$	707,000
Fair value of the 30% noncontrolling interest					303,000
Wilson business fair value				$	1,010,000
Wilson book value					790,000
Excess fair value over book value				$	220,000
Assignments to adjust Wilson’s assets to fair value:
To buildings (20-year remaining life)	$	60,000
To equipment (4-year remaining life)		(20,000	)
To franchises (10-year remaining life)		40,000			80,000
To goodwill (indefinite life)				$	140,000

House regularly buys inventory from Wilson at a markup of 25 percent more than cost. House's purchases during 2016 and 2017 and related ending inventory balances follow:

Year	Intra-Entity Purchases	Remaining Intra-Entity Inventory— End of Year (at transfer price)
2016	$120,000	$40,000
2017	150,000	60,000

On January 1, 2018, House and Wilson acted together as co-acquirers of 80 percent of Cuddy Company's outstanding common stock. The total price of these shares was $240,000, indicating neither goodwill nor other specific fair-value allocations. Each company put up one-half of the consideration transferred. During 2018, House acquired additional inventory from Wilson at a price of $200,000. Of this merchandise, 45 percent is still held at year-end. Using the three companies' following financial records for 2018, prepare a consolidation worksheet. The partial equity method based on separate company incomes has been applied to each investment. PLEASE SHOW ME WORKSHEET HOW YOU GET THE FINAL NUMBERS. TRULY APPRECIATE YOU SMART PPL.

	House Corporation		Wilson Company	Cuddy Company
Sales and other revenues	$	(900,000	)	$	(700,000	)	$	(300,000	)
Cost of goods sold		551,000			300,000			140,000
Operating expenses		219,000			270,000			90,000
Income of Wilson Company		(91,000	)		0			0
Income of Cuddy Company		(28,000	)		(28,000	)		0
Net income	$	(249,000	)	$	(158,000	)	$	(70,000	)
Retained earnings, 1/1/18	$	(820,000	)	$	(590,000	)	$	(150,000	)
Net income (above)		(249,000	)		(158,000	)		(70,000	)
Dividends declared		100,000			96,000			50,000
Retained earnings, 12/31/18	$	(969,000	)	$	(652,000	)	$	(170,000	)
Cash and receivables	$	220,000		$	334,000		$	67,000
Inventory		390,200			320,000			103,000
Investment in Wilson Company		807,800			0			0
Investment in Cuddy Company		128,000			128,000			0
Buildings		385,000			320,000			144,000
Equipment		310,000			130,000			88,000
Land		180,000			300,000			16,000
Total assets	$	2,421,000		$	1,532,000		$	418,000
Liabilities	$	(632,000	)	$	(570,000	)	$	(98,000	)
Common stock		(820,000	)		(310,000	)		(150,000	)
Retained earnings, 12/31/18		(969,000	)		(652,000	)		(170,000	)
Total liabilities and equities	$	(2,421,000	)	$	(1,532,000	)	$	(418,000	)

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