On January 1, 2021, Pikes Corporation loaned Venti Company $309,000 and agreed to guarantee all of Venti's long-term debt in exchange for (1) decision-making authority over all of Venti's activities and (2) an annual managementfee of 25 percent of Venti's annual revenues. As a result of the agreement, Pikes becomes the primary beneficiaryof Venti (now a variable interest entity). Pikes' loan to Venti stipulated a 10 percent (market) rate of interest to bepaid annually with principal due in 10 years.On January 1, 2021, Pikes estimated that the fair value of Venti's equity shares equaled $84,000 while Venti's bookvalue was $64,000. Any excess fair over book value at that date was attributed to Venti's trademark with anindefinite life.Because Pikes owns no equity in Venti, all of the acquisition-date excess fair over book value is allocated to thenoncontrolling interest.Venti paid Pikes 25 percent of its 2021 revenues at the end of the year and recorded the payment in otheroperating expenses. Venti also paid the interest to Pikes for the loan. On December 31, 2021, Pikes and Ventisubmitted the following statements for consolidation. (Parentheses indicate credit balances.)PikesVentiRevenues2$(801,000)$ (225,000)Management feeCost of good soldOther operating expenses(56,250)630,00085,000(30,900)89,90064,900Interest incomeInterest expense39,900Net income(173,150)(30,300)Retained earnings, 1/1(1,381,800)(173,150)(49,000)(30,300)Net income76,800(1,478,150)Dividends declaredRetained earnings, 12/31(79,300)Current assets405,000309,00082,000Loan receivable from VentiEquipment (net)904,000536,000Trademark134,000Total assets1,618,000752,000(101,000)(309,000)(247,700)(15,000)(79,300)Current liabilities(89,850)Loan payable to PikesOther long-term debt(50,000)(1,478,150)Common stockRetained earnings, 12/31Total liabilities and equity$(1,618,000)$ (752,000)Prepare the December 31, 2021, consolidation worksheet for Pikes and its variable interest entity Venti. (Foraccounts where multiple consolidation entries are required, combine all debit entries into one amount and enterthis amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount andenter this amount in the credit column of the worksheet. Input all amounts as positive values.)

Consolidation is a process in which financial statements of subsidiary company is aggregated by the…

Prepare the December 31, 2021, consolidation worksheet for Pikes and its variable interest entity Venti. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and ente 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.)

Prepare the December 31, 2021, consolidation worksheet for Pikes and its variable interest entity Venti. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and ente 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

See similar textbooks

Similar questions

Selected accounts of Beam Electrical, Inc., at November 30, 2018, follow. (Click the icon to view the accounts.) Read the requirements. Requirement 1. Prepare the entity's closing entries. Begin by closing out the revenue accounts. (Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Date Accounts Debit Credit Nov
Hi, How do I organize these transactions ? Thanks
On January 1, 2022, Sandhill Co. had a balance of $411,000 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2022, the company had the following additional transactions. Jan. 2 Purchased a patent (7-year life) $307,650. July 1 Sept. 1 Acquired a 9-year franchise; expiration date July 1, 2,031, $576,000. Research and development costs $178,500.
The reporting date is June 30, 2020. Classify the accounts as to what they belong. Current or noncurrent. 1.Loans Payable ( Due Dec 31,2020) 2 Loans Payable ( Due May 5,2022) 3.Notes Receivable ( due Oct. 8 ,2020) 4.Notes Receivable ( due Dec. 10, 2021) Please answer it completely. Thanks.
Wildhorse Company, organized in 2024, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2025. 1/2/25 Purchased patent (8-year life) 4/1/25 Purchase goodwill (indefinite life) 7/1/25 Purchased franchise with 10-year life; expiration date 7/1/35 8/1/25 Payment of copyright (5-year life) 9/1/25 Research and development costs $360,800 361,000 441,000 Debit 169,200 231,000 $1,563,000 Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Credit
(b) Prepare the entry to record the accrued interest and the amortization of premium on December 31, 2025, using the straight-line method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 1,225.) Date Dec. 31, 2025 Account Titles and Explanation Debit Credit
DETERMINE THE BALANCES OF THE FOLLOWING ACCOUNTS AS OF SEPTEMBER 30, 2017. (FORMAT ANSWERl: 1,000,000) Entity A began operation to provide credit collection services on September 2020. The Unadjusted Trial Balance as of September 30, 2020 is as shown below: Entity A Trial Balance September 30, 2020 Cash and Cash Equivalent 174,000 Accounts Receivable 96,200 Office Supplies 10,500 Prepaid Insurance 24,000 Equipment 300,000 Notes Payable 100,000 Accounts Payable 123,500 Unearned Service Income 50,000 A, Capital 200,000 A, Drawings 6,000 Service Income 176,200 Salaries Expense 12,000 Transportation Expense 13,000 Rent Expense 12,000 MIscellaneous Expenses 2,000 649,700 649,700 Additional Data 1. Unused supplies on September 30, 2020 is P7,500 2. The equipment was acquired on September 1, 2017 with useful life of 5 years and with estimated salvage value of P30,000 3. Interest on the notes payable is 18%. The note was issued on September 1, 2020. 4. The prepaid insurance is for the period…
On January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a total of $980,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $790,000, retained earnings of $340,000, and a noncontrolling interest fair value of $420,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing. During the next two years, Smashing reported the following: Inventory Dividends Purchases from Net Income Declared Corgan $190,000 210, 000 $240, 000 $44,000 54,000 2020 2021 220,000 Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2020 and 2021, 50 percent of the current year purchases remain in Smashing's inventory. a. Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2021. b. Prepare the worksheet…
I need help with this practice problem. Put the balances from the adjusted trial balance into the T accountsCreate properly formatted income statement and balance sheet for the year and the balance sheet as of 12/31.Create the closing entries.Post the results of the closing entries into the T accountDraw off balances for the T accounts.Create the post-closing trial balance
Kindly prepare the Worksheet for this. thank yoouu!!
Gadubhai
Consider the following note payable transactions of Cargo Video Productions. i (Click the icon to view the transactions.) Requirements 1. Journalize the transactions for the company. 2. Considering the given transactions only, what are Cargo Video Productions' total liabilities on December 31, 2025? Requirement 1. Journalize the transactions for the company. (Record debits first, then credits. Select explanations on the last line of the journal entry.) Sep. 1, 2024: Purchased equipment costing $270,000 by issuing a nine-year, 7% note payable. The note requires annual principal payments of $30,000 plus interest each September 1. Date Accounts and Explanation Debit Credit 2024 Sep. 1 Equipment 270,000 Notes Payable 270,000 Purchased equipment by issuing a 9-year, 7% note. Dec 31, 2024: Accrued interest on the note payable. Date Accounts and Explanation Debit Credit 2024 Dec. 31 Interest Expense 6,300 Interest Payable 6,300 Recognized accrued interest. Sep. 1, 2025: Paid the first…