Company Tyler Jasmine Company Revenues-operating.. Expenses . Equipment (net). Buildings (net) Common stock Retained earnings, 12/31/18 $(104,000) 74,000 50,000 $(310,000) 320,000 220,000 (290,000) (410,000) (50,000) (160,000) Net Dividends Income Declared 2016 $50,000 60,000 30,000 $10,000 40,000 20,000 2017 2018
Company Tyler Jasmine Company Revenues-operating.. Expenses . Equipment (net). Buildings (net) Common stock Retained earnings, 12/31/18 $(104,000) 74,000 50,000 $(310,000) 320,000 220,000 (290,000) (410,000) (50,000) (160,000) Net Dividends Income Declared 2016 $50,000 60,000 30,000 $10,000 40,000 20,000 2017 2018
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Tyler Company acquired all of Jasmine Company’s outstanding stock on January 1, 2016, for $206,000 in cash. Jasmine had a book value of only $140,000 on that date. However, equipment (having an eight-year remaining life) was undervalued by $54,400 on Jasmine’s financial records. A building with a 20-year remaining life was overvalued by $10,000. Subsequent to the acquisition, Jasmine reported the following:
In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these two companies as of December 31, 2018, follow:
Determine and explain the following account balances as of December 31, 2018:
a. Investment in Jasmine Company (on Tyler’s individual financial records).
b. Equity in Subsidiary Earnings (on Tyler’s individual financial records).
c. Consolidated Net Income.
d. Consolidated Equipment (net).
e. Consolidated Buildings (net).
f. Consolidated Goodwill (net).
g. Consolidated Common Stock.
h. Consolidated Retained Earnings , 12/31/18.
Transcribed Image Text:Company
Tyler
Jasmine
Company
Revenues-operating..
Expenses .
Equipment (net).
Buildings (net)
Common stock
Retained earnings, 12/31/18
$(104,000)
74,000
50,000
$(310,000)
320,000
220,000
(290,000)
(410,000)
(50,000)
(160,000)
Transcribed Image Text:Net
Dividends
Income
Declared
2016
$50,000
60,000
30,000
$10,000
40,000
20,000
2017
2018
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