Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid $896,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $224,000 both before and after Miller’s acquisition. On January 1, 2019, Taylor reported a book value of $626,000 (Common Stock = $313,000; Additional Paid-In Capital = $93,900; Retained Earnings = $219,100). Several of Taylor’s buildings that had a remaining life of 20 years were undervalued by a total of $83,400. During the next three years, Taylor reports income and declares dividends as follows: Year Net Income Dividends 2019 $ 73,100 $ 10,500 2020 94,500 15,800 2021 105,300 21,100 Determine the appropriate answers for each of the following questions: What amount of excess depreciation expense should be recognized in the consolidated financial statements for the initial years following this acquisition? If a consolidated balance sheet is prepared as of January 1, 2019, what amount of goodwill should be recognized? If a consolidation worksheet is prepared as of January 1, 2019, what Entry S and Entry A should be included? On the separate financial records of the parent company, what amount of investment income would be reported for 2019 under each of the following accounting methods? The equity method. The partial equity method. The initial value method. On the parent company’s separate financial records, what would be the December 31, 2021, balance for the Investment in Taylor Company account under each of the following accounting methods? The equity method. The partial equity method. The initial value method. As of December 31, 2020, Miller’s Buildings account on its separate records has a balance of $844,000 and Taylor has a similar account with a $316,500 balance. What is the consolidated balance for the Buildings account? What is the balance of consolidated goodwill as of December 31, 2021? Assume that the parent company has been applying the equity method to this investment. On December 31, 2021, the separate financial statements for the two companies present the following information: Please answer from part D and rest.

Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid $896,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $224,000 both before and after Miller’s acquisition. On January 1, 2019, Taylor reported a book value of $626,000 (Common Stock = $313,000; Additional Paid-In Capital = $93,900; Retained Earnings = $219,100). Several of Taylor’s buildings that had a remaining life of 20 years were undervalued by a total of $83,400. During the next three years, Taylor reports income and declares dividends as follows: Year Net Income Dividends 2019 $ 73,100 $ 10,500 2020 94,500 15,800 2021 105,300 21,100 Determine the appropriate answers for each of the following questions: What amount of excess depreciation expense should be recognized in the consolidated financial statements for the initial years following this acquisition? If a consolidated balance sheet is prepared as of January 1, 2019, what amount of goodwill should be recognized? If a consolidation worksheet is prepared as of January 1, 2019, what Entry S and Entry A should be included? On the separate financial records of the parent company, what amount of investment income would be reported for 2019 under each of the following accounting methods? The equity method. The partial equity method. The initial value method. On the parent company’s separate financial records, what would be the December 31, 2021, balance for the Investment in Taylor Company account under each of the following accounting methods? The equity method. The partial equity method. The initial value method. As of December 31, 2020, Miller’s Buildings account on its separate records has a balance of $844,000 and Taylor has a similar account with a $316,500 balance. What is the consolidated balance for the Buildings account? What is the balance of consolidated goodwill as of December 31, 2021? Assume that the parent company has been applying the equity method to this investment. On December 31, 2021, the separate financial statements for the two companies present the following information: Please answer from part D and rest.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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On January 1, 2019, Taylor reported a book value of $626,000 (Common Stock = $313,000; Additional Paid-In Capital = $93,900; Retained Earnings = $219,100). Several of Taylor’s buildings that had a remaining life of 20 years were undervalued by a total of $83,400.

During the next three years, Taylor reports income and declares dividends as follows:

Year	Net Income	Dividends
2019	$	73,100	$	10,500
2020		94,500		15,800
2021		105,300		21,100

Determine the appropriate answers for each of the following questions:

What amount of excess depreciation expense should be recognized in the consolidated financial statements for the initial years following this acquisition?
If a consolidated balance sheet is prepared as of January 1, 2019, what amount of goodwill should be recognized?
If a consolidation worksheet is prepared as of January 1, 2019, what Entry S and Entry A should be included?

On the separate financial records of the parent company, what amount of investment income would be reported for 2019 under each of the following accounting methods?

The equity method.
The partial equity method.
The initial value method.

On the parent company’s separate financial records, what would be the December 31, 2021, balance for the Investment in Taylor Company account under each of the following accounting methods?

The equity method.
The partial equity method.
The initial value method.

As of December 31, 2020, Miller’s Buildings account on its separate records has a balance of $844,000 and Taylor has a similar account with a $316,500 balance. What is the consolidated balance for the Buildings account?
What is the balance of consolidated goodwill as of December 31, 2021?
Assume that the parent company has been applying the equity method to this investment. On December 31, 2021, the separate financial statements for the two companies present the following information:

Please answer from part D and rest.

Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid $896,000 in cash to the owners of
Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $224,000
both before and after Miller's acquisition.
On January 1, 2019, Taylor reported a book value of $626,000 (Common Stock = $313,000; Additional Paid-In Capital = $93,900;
Retained Earnings = $219,100). Several of Taylor's buildings that had a remaining life of 20 years were undervalued by a total of
$83,400.
During the next three years, Taylor reports income and declares dividends as follows:
Dividends
$10,500
15,800
21,100
Year
Net Income
2019
2020
2021
$ 73,100
94,500
105,300
Determine the appropriate answers for each of the following questions:
a. What amount of excess depreciation expense should be recognized in the consolidated financial statements for the initial years
following this acquisition?
b. If a consolidated balance sheet is prepared as of January 1, 2019, what amount of goodwill should be recognized?
c. If a consolidation worksheet is prepared as of January 1, 2019, what Entry S and Entry A should be included?
d. On the separate financial records of the parent company, what amount of investment income would be reported for 2019 under
each of the following accounting methods?
• The equity method.
• The partial equity method.
The initial value method.
e. On the parent company's separate financial records, what would be the December 31, 2021, balance for the Investment in Taylor
Company account under each of the following accounting methods?
• The equity method.
• The partial equity method.
The initial value method.
f. As of December 31, 2020, Miller's Buildings account on its separate records has a balance of $844,000 and Taylor has a similar
account with a $316,500 balance. What is the consolidated balance for the Buildings account?
g. What is the balance of consolidated goodwill as of December 31, 2021?
h. Assume that the parent company has been applying the equity method to this investment. On December 31, 2021, the separate
financial statements for the two companies present the following information:
Common stock
Additional paid-in capital
Retained earnings, 12/31/21
Miller
Company
$ 527,500
295,400
654,100
Taylor
Company
$ 313,000
93,900
444,600
What will be the consolidated balance of each of these accounts?

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