On January 1, 2019, Aronsen Company acquired 90 percent of Siedel Company's outstanding shares. Siedel had a net book value on that date of $500,000: common stock ($10 par value) of $300,000 and retained earnings of $200,000. Aronsen paid $766,800 for this investment. The acquisition-date fair value of the 10 percent noncontrolling interest was $85,200. The excess fair value over book value associated with the acquisition was used to increase land by $304,000 and to recognize copyrights (16-year remaining life) at $48,000. Subsequent to the acquisition, Aronsen applied the initial value method to its investment account. In the 2019-2020 period, the subsidiary's retained earnings increased by $100,000. During 2021, Siedel earned income of $103.000 while declaring $43,000 in dividends. Also, at the beginning of 2021, Siedel issued 15,000 new shares of common stock for $32 per share to finance the expansion of its corporate facilities. Aronsen purchased none of these additional shares and therefore recorded no entry. Prepare the appropriate 2021 consolidation entries for these two companies. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) NU 1 2 3 4 5 6 MansacLIONI 1 2 3 4 5 6 Investment in Siedel Retained earnings (Aronsen) Investment in Siedel Additional paid-in capital (Aronsen) Common stock (Siedel) Additional paid-in capital (Siedel) Retained earnings (Siedel) Investment in Siedel Noncontrolling interest in Siedel Land Copyrights ACCOUNTLO Investment in Siedel Noncontrolling interest in Siedel Dividend income Dividends declared Amortization expense Copyrights ✓ ✓ ✔ 33333 3333 33 33 DOVIL 559,800 X 5,250 X 360,000 X 120,000 X 330,000 X 152,000 X 78,000 X 17,250 x 6,000 X VIQUIL 105,300 x 5,250 x 607,500 X 202,500 x 172,500 X 57,500 X 17,250 X 6,000 X
On January 1, 2019, Aronsen Company acquired 90 percent of Siedel Company's outstanding shares. Siedel had a net book value on that date of $500,000: common stock ($10 par value) of $300,000 and retained earnings of $200,000. Aronsen paid $766,800 for this investment. The acquisition-date fair value of the 10 percent noncontrolling interest was $85,200. The excess fair value over book value associated with the acquisition was used to increase land by $304,000 and to recognize copyrights (16-year remaining life) at $48,000. Subsequent to the acquisition, Aronsen applied the initial value method to its investment account. In the 2019-2020 period, the subsidiary's retained earnings increased by $100,000. During 2021, Siedel earned income of $103.000 while declaring $43,000 in dividends. Also, at the beginning of 2021, Siedel issued 15,000 new shares of common stock for $32 per share to finance the expansion of its corporate facilities. Aronsen purchased none of these additional shares and therefore recorded no entry. Prepare the appropriate 2021 consolidation entries for these two companies. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) NU 1 2 3 4 5 6 MansacLIONI 1 2 3 4 5 6 Investment in Siedel Retained earnings (Aronsen) Investment in Siedel Additional paid-in capital (Aronsen) Common stock (Siedel) Additional paid-in capital (Siedel) Retained earnings (Siedel) Investment in Siedel Noncontrolling interest in Siedel Land Copyrights ACCOUNTLO Investment in Siedel Noncontrolling interest in Siedel Dividend income Dividends declared Amortization expense Copyrights ✓ ✓ ✔ 33333 3333 33 33 DOVIL 559,800 X 5,250 X 360,000 X 120,000 X 330,000 X 152,000 X 78,000 X 17,250 x 6,000 X VIQUIL 105,300 x 5,250 x 607,500 X 202,500 x 172,500 X 57,500 X 17,250 X 6,000 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Jm. 161.
Transcribed Image Text:On January 1, 2019, Aronsen Company acquired 90 percent of Siedel Company's outstanding shares. Siedel had a net book value on
that date of $500,000: common stock ($10 par value) of $300,000 and retained earnings of $200,000.
Aronsen paid $766,800 for this investment. The acquisition-date fair value of the 10 percent noncontrolling interest was $85,200. The
excess fair value over book value associated with the acquisition was used to increase land by $304,000 and to recognize copyrights
(16-year remaining life) at $48,000. Subsequent to the acquisition, Aronsen applied the initial value method to its investment account.
In the 2019-2020 period, the subsidiary's retained earnings increased by $100,000. During 2021, Siedel earned income of $103,000
while declaring $43,000 in dividends. Also, at the beginning of 2021, Siedel issued 15,000 new shares of common stock for $32 per
share to finance the expansion of its corporate facilities. Aronsen purchased none of these additional shares and therefore recorded
no entry.
Prepare the appropriate 2021 consolidation entries for these two companies. (If no entry is required for a transaction/event, select
"No journal entry required" in the first account field.)
NU
1
2
3
4
5
6
mtanisacLIONT
1
2
3
4
5
6
Investment in Siedel
Retained earnings (Aronsen)
Investment in Siedel
Additional paid-in capital (Aronsen)
Common stock (Siedel)
Additional paid-in capital (Siedel)
Retained earnings (Siedel)
Investment in Siedel
Noncontrolling interest in Siedel
Land
Copyrights
ACCOUTILS
Investment in Siedel
Noncontrolling interest in Siedel
Dividend income
Dividends declared
Amortization expense
Copyrights
✔
♥
✓
♥
✔
›› › ›
✓
♥
33
DOVIL
559,800 X
5,250 x
360,000 X
120,000 X
330,000 X
152,000 X
78,000 X
17,250 X
6,000 X
VIQUIL
105,300 X
5,250 X
607,500 X
202,500X
172,500 X
57,500 X
17,250 X
6,000 X
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