Plaza, Incorporated, acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1, 2024, in exchange for $985,400 cash. At the acquisition date, Stanford’s total fair value, including the noncontrolling interest, was assessed at $1,231,750. Also at the acquisition date, Stanford's book value was $532,500. Several individual items on Stanford’s financial records had fair values that differed from their book values as follows: Items Book Value Fair Value Trade names (indefinite life) $ 301,200 $ 354,900 Property and equipment (net, 8-year remaining life) 232,000 255,200 Patent (14-year remaining life) 120,400 161,000 For internal reporting purposes, Plaza, Incorporated, employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2024, for both companies. Accounts Plaza Stanford Revenues $ (828,200) $ (746,500) Cost of goods sold 458,700 321,700 Depreciation expense 194,400 29,000 Amortization expense 0 23,000 Equity in income of Stanford (293,600) 0 Net income $ (468,700) $ (372,800) Retained earnings, 1/1/24 $ (1,036,200) $ (431,000) Net income (468,700) (372,800) Dividends declared 243,800 29,000 Retained earnings, 12/31/24 $ (1,261,100) $ (774,800) Current assets $ 698,800 $ 370,700 Investment in Stanford 1,255,800 0 Trade names 195,300 301,200 Property and equipment (net) 837,900 203,000 Patents 0 97,400 Total assets $ 2,987,800 $ 972,300 Accounts payable $ (115,200) $ (96,000) Common stock (244,800) (70,000) Additional paid-in capital (1,366,700) (31,500) Retained earnings (above) (1,261,100) (774,800) Total liabilities and equities $ (2,987,800) $ (972,300) At year-end, there were no intra-entity receivables or payables. Required: Prepare a worksheet to consolidate the financial statements of Plaza, Incorporated, and its subsidiary Stanford. Note: For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.

Plaza, Incorporated, acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1, 2024, in exchange for $985,400 cash. At the acquisition date, Stanford’s total fair value, including the noncontrolling interest, was assessed at $1,231,750. Also at the acquisition date, Stanford's book value was $532,500. Several individual items on Stanford’s financial records had fair values that differed from their book values as follows: Items Book Value Fair Value Trade names (indefinite life) $ 301,200 $ 354,900 Property and equipment (net, 8-year remaining life) 232,000 255,200 Patent (14-year remaining life) 120,400 161,000 For internal reporting purposes, Plaza, Incorporated, employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2024, for both companies. Accounts Plaza Stanford Revenues $ (828,200) $ (746,500) Cost of goods sold 458,700 321,700 Depreciation expense 194,400 29,000 Amortization expense 0 23,000 Equity in income of Stanford (293,600) 0 Net income $ (468,700) $ (372,800) Retained earnings, 1/1/24 $ (1,036,200) $ (431,000) Net income (468,700) (372,800) Dividends declared 243,800 29,000 Retained earnings, 12/31/24 $ (1,261,100) $ (774,800) Current assets $ 698,800 $ 370,700 Investment in Stanford 1,255,800 0 Trade names 195,300 301,200 Property and equipment (net) 837,900 203,000 Patents 0 97,400 Total assets $ 2,987,800 $ 972,300 Accounts payable $ (115,200) $ (96,000) Common stock (244,800) (70,000) Additional paid-in capital (1,366,700) (31,500) Retained earnings (above) (1,261,100) (774,800) Total liabilities and equities $ (2,987,800) $ (972,300) At year-end, there were no intra-entity receivables or payables. Required: Prepare a worksheet to consolidate the financial statements of Plaza, Incorporated, and its subsidiary Stanford. Note: For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Items	Book Value	Fair Value
Trade names (indefinite life)	$ 301,200	$ 354,900
Property and equipment (net, 8-year remaining life)	232,000	255,200
Patent (14-year remaining life)	120,400	161,000

Accounts	Plaza	Stanford
Revenues	$ (828,200)	$ (746,500)
Cost of goods sold	458,700	321,700
Depreciation expense	194,400	29,000
Amortization expense	0	23,000
Equity in income of Stanford	(293,600)	0
Net income	$ (468,700)	$ (372,800)

Retained earnings, 1/1/24	$ (1,036,200)	$ (431,000)
Net income	(468,700)	(372,800)
Dividends declared	243,800	29,000
Retained earnings, 12/31/24	$ (1,261,100)	$ (774,800)

Current assets	$ 698,800	$ 370,700
Investment in Stanford	1,255,800	0
Trade names	195,300	301,200
Property and equipment (net)	837,900	203,000
Patents	0	97,400
Total assets	$ 2,987,800	$ 972,300

Accounts payable	$ (115,200)	$ (96,000)
Common stock	(244,800)	(70,000)
Additional paid-in capital	(1,366,700)	(31,500)
Retained earnings (above)	(1,261,100)	(774,800)
Total liabilities and equities	$ (2,987,800)	$ (972,300)

Required:

Prepare a worksheet to consolidate the financial statements of Plaza, Incorporated, and its subsidiary Stanford.

Note: For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.

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