On December 31, 2011, WILLS International purchased 70% of the outstanding common stock of SEMS Chemical. WILLS paid $140,000 for the shares. SEMS had stockholders' equity consisting of capital stock amounting to $20,000 and retained earnings amounting to $80,000. the fair value of all recorded SEMS assets and liabilities equal their book values, with the exception of a equipment (5 years) that was overvalued by $10,000, land undervalued by 36,000. Inventory undervalued by $ 4000, Any remaining excess fair value was attributed to goodwill. The separate financial statements at December 31, 2012 appear in the first two columns of the work papers. Required: Complete the consolidation working papers for WILLS and SEMS for the year 2012.
On December 31, 2011, WILLS International purchased 70% of the outstanding common stock of SEMS Chemical. WILLS paid $140,000 for the shares. SEMS had stockholders' equity consisting of capital stock amounting to $20,000 and retained earnings amounting to $80,000. the fair value of all recorded SEMS assets and liabilities equal their book values, with the exception of a equipment (5 years) that was overvalued by $10,000, land undervalued by 36,000. Inventory undervalued by $ 4000, Any remaining excess fair value was attributed to goodwill. The separate financial statements at December 31, 2012 appear in the first two columns of the work papers. Required: Complete the consolidation working papers for WILLS and SEMS for the year 2012.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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M32.
Transcribed Image Text:On December 31, 2011, WILLS International purchased 70% of the outstanding common
stock of SEMS Chemical. WILLS paid $140,000 for the shares. SEMS had stockholders'
equity consisting of capital stock amounting to $20,000 and retained earnings amounting
to $80,000. the fair value of all recorded SEMS assets and liabilities equal their book
values, with the exception of a equipment (5 years) that was overvalued by $10,000,
land undervalued by 36,000. Inventory undervalued by $ 4000, Any remaining excess
fair value was attributed to goodwill. The separate financial statements at December 31,
2012 appear in the first two columns of the work papers.
Required: Complete the consolidation working papers for WILLS and SEMS for the year
2012.
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