On December 31, Year 3, Mueller Corp. acquired 80% of the outstanding shares of Wilson Inc. for a total cost of $240,000. The carrying amount of Wilson's assets, liabilities, and equity was equal to fair value except for the following: Inventory Equipment, net Patent Long-term debt Common shares Retained earnings Dividend income Net income Common shares Retained earnings $ Carrying Amount Inventory Equipment (6 years) Patents (8 years) Long-term debt (5 years) Goodwill 60,000 $ 270,000 180,000 175,000 42,000 As at December 31, Year 3, the equipment and patent had an estimated useful life of six and eight years, respectively. The long-term debt is due on January 1, Year 9. There was a goodwill impairment loss of $3,000 in Year 5. There were no other impairment losses. Mueller uses the cost method to account for its investment in Wilson. The book values of selected accounts for the year ended December 31, Year 7 were as follows: Fair Value 68,000 276,000 40,000 160,000 Mueller $ 12,000 ? ? Wilson 62,000 $ 26,000 100,000 250,000 175,000 110,000 Required: (a) Prepare a schedule of changes to the acquisition differential for the four year period ending December 31, Year 7. (Leave no cells blank - be certain to enter "0" wherever required. Omit $ sign in your response. Negative/Deductible amounts should be indicated by a minus sign.) Balance Dec. 1 Year 3 $ $ Changes Year 4, 5&6 $ $ Year 7 $ $ Balance Dec. 31 Year 7 $ $
On December 31, Year 3, Mueller Corp. acquired 80% of the outstanding shares of Wilson Inc. for a total cost of $240,000. The carrying amount of Wilson's assets, liabilities, and equity was equal to fair value except for the following: Inventory Equipment, net Patent Long-term debt Common shares Retained earnings Dividend income Net income Common shares Retained earnings $ Carrying Amount Inventory Equipment (6 years) Patents (8 years) Long-term debt (5 years) Goodwill 60,000 $ 270,000 180,000 175,000 42,000 As at December 31, Year 3, the equipment and patent had an estimated useful life of six and eight years, respectively. The long-term debt is due on January 1, Year 9. There was a goodwill impairment loss of $3,000 in Year 5. There were no other impairment losses. Mueller uses the cost method to account for its investment in Wilson. The book values of selected accounts for the year ended December 31, Year 7 were as follows: Fair Value 68,000 276,000 40,000 160,000 Mueller $ 12,000 ? ? Wilson 62,000 $ 26,000 100,000 250,000 175,000 110,000 Required: (a) Prepare a schedule of changes to the acquisition differential for the four year period ending December 31, Year 7. (Leave no cells blank - be certain to enter "0" wherever required. Omit $ sign in your response. Negative/Deductible amounts should be indicated by a minus sign.) Balance Dec. 1 Year 3 $ $ Changes Year 4, 5&6 $ $ Year 7 $ $ Balance Dec. 31 Year 7 $ $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do not Give image format
Transcribed Image Text:(b) Calculate consolidated net income attributable to the parent, ending retained earnings and non-controlling interest at December 31,
Year 7. (Omit $ sign in your response.)
Consolidated net income attributable to the parent
Consolidated retained earnings
Non-controlling interest.
64 64 64
$
$
E
Transcribed Image Text:On December 31, Year 3, Mueller Corp. acquired 80% of the outstanding shares of Wilson Inc. for a total cost of $240,000. The
carrying amount of Wilson's assets, liabilities, and equity was equal to fair value except for the following:
Inventory
Equipment, net
Patent
Long-term debt
Common shares
Retained earnings
$
Dividend income
Net income
Common shares
Retained earnings
Carrying
Amount
60,000
270,000
Inventory
Equipment (6 years)
Patents (8 years)
Long-term debt (5 years)
Goodwill
180,000
175,000
42,000
As at December 31, Year 3, the equipment and patent had an estimated useful life of six and eight years, respectively. The long-term
debt is due on January 1, Year 9. There was a goodwill impairment loss of $3,000 in Year 5. There were no other impairment losses.
Mueller uses the cost method to account for its investment in Wilson. The book values of selected accounts for the year ended
December 31, Year 7 were as follows:
Mueller
$ 12,000
Fair Value
$
68,000
276,000
40,000
160,000
100,000
250,000
62,000 $ 26,000
175,000
110,000
?
?
Wilson
Balance
Dec. 1
Year 3
$
Required:
(a) Prepare a schedule of changes to the acquisition differential for the four year period ending December 31, Year 7. (Leave no cells
blank - be certain to enter "0" wherever required. Omit $ sign in your response. Negative/Deductible amounts should be indicated
by a minus sign.)
Changes
Year 4, 5&6
$
$
Year 7
$
$
Balance
Dec. 31
Year 7
$
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education