Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $158,000. At that date, the fair value of Saver's buildings and equipment was $32,000 more than the book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price's management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $5,500. Trial balance data for Price and Saver on December 31, 20X8, are as follows: Price Corporation Debit Item Cash Accounts Receivable Inventory Land Buildings and Equipment Investment in Saver Company Cost of Goods Sold Wage Expense Depreciation Expense Interest Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Wages Payable Notes Payable Common Stock Retained Earnings Sales Income from Saver Company Required: Saver Company Credit Debit Credit $ 22,500 $ 27,000 76,000 15,000 96,000 31,000 36,000 21,000 335,000 156,000 148,300 131,000 95,000 66,000 30,000 28,000 13,000 15,000 7,000 25,500 20,000 36,000 19,000 $ 148,000 $ 70,000 75,000 22,000 23,000 12,000 156,000 32,000 206,000 60,000 108,000 40,000 290,000 198,000 9,300 $ 1,015,300 $ 1,015,300 $ 434,000 $ 434,000 a. Prepare all consolidation entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8. b. Prepare a three-part consolidation worksheet for 20X8 in good form.. Income Statement Sales Less: COGS Less: Wage expense Less: Depreciation expense Less: Interest expense Less: Other expenses Consolidated Credit December 31, 20X8 Price Corporation Saver Company Consolidation Entries Debit $ 290,000 $ 198,000 151,000 × 95,000 × (23,000) > (12,000) x 28,000 × 13,000 (3,200) X 15,000 7,000 25,500 20,000 20,500 S 488,000 246,000 (35,000) 44,200 22,000 45,500 (20,500) Less: Impairment loss Income from Saver Company Net Income $ 486,500 $ 321,000 $ 17,300 $ 0 $ 790,200 Statement of Retained Earnings Beginning balance $ 1,015,300 $ 434,000 S 1,449,300 Net income Less: Dividends declared 486,500 9,300 × 321,000 790,200 Ending Balance $ 1,511,100 $ 9,300 × 764,300 $ 18,600 0 0 S 2,258,100 Assets Cash $ 22,500 $ 27,000 ( Accounts receivable 76,000 15,000 Inventory 96,000 31,000 Land Buildings and equipment Less: Accumulated depreciation Investment in Saver Company 36,000 21,000 ( $ 49,500 91,000 127,000 57,000 355,000 × 156,000 (148,000) (70,000) 511,000 (218,000) 148,300 (148,300) Goodwill 5,500 Total Assets $ 585,800 $ 180,000 $ (142,800) 0 $ 5,500 623,000 Liabilities and Stockholders' Equity Accounts payable $ (75,000) $(22,000) > Wages payable (23,000) > (12,000) x Notes payable (156,000) x (32,000) * Common stock (206,000) > (60,000) > Retained earnings Total Liabilities and Fruity $ (460 000) Is (126 000) 0 S 0 0

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 19E
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Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $158,000.
At that date, the fair value of Saver's buildings and equipment was $32,000 more than the book value.
Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price's
management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares
had been impaired and the correct carrying value was $5,500.
Trial balance data for Price and Saver on December 31, 20X8, are as follows:
Price Corporation
Debit
Item
Cash
Accounts Receivable
Inventory
Land
Buildings and Equipment
Investment in Saver Company
Cost of Goods Sold
Wage Expense
Depreciation Expense
Interest Expense
Other Expenses
Dividends Declared
Accumulated Depreciation
Accounts Payable
Wages Payable
Notes Payable
Common Stock
Retained Earnings
Sales
Income from Saver Company
Required:
Saver Company
Credit
Debit
Credit
$ 22,500
$ 27,000
76,000
15,000
96,000
31,000
36,000
21,000
335,000
156,000
148,300
131,000
95,000
66,000
30,000
28,000
13,000
15,000
7,000
25,500
20,000
36,000
19,000
$ 148,000
$ 70,000
75,000
22,000
23,000
12,000
156,000
32,000
206,000
60,000
108,000
40,000
290,000
198,000
9,300
$ 1,015,300 $ 1,015,300
$ 434,000
$ 434,000
a. Prepare all consolidation entries needed to prepare a three-part consolidation worksheet as of
December 31, 20X8.
b. Prepare a three-part consolidation worksheet for 20X8 in good form..
Transcribed Image Text:Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $158,000. At that date, the fair value of Saver's buildings and equipment was $32,000 more than the book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price's management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $5,500. Trial balance data for Price and Saver on December 31, 20X8, are as follows: Price Corporation Debit Item Cash Accounts Receivable Inventory Land Buildings and Equipment Investment in Saver Company Cost of Goods Sold Wage Expense Depreciation Expense Interest Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Wages Payable Notes Payable Common Stock Retained Earnings Sales Income from Saver Company Required: Saver Company Credit Debit Credit $ 22,500 $ 27,000 76,000 15,000 96,000 31,000 36,000 21,000 335,000 156,000 148,300 131,000 95,000 66,000 30,000 28,000 13,000 15,000 7,000 25,500 20,000 36,000 19,000 $ 148,000 $ 70,000 75,000 22,000 23,000 12,000 156,000 32,000 206,000 60,000 108,000 40,000 290,000 198,000 9,300 $ 1,015,300 $ 1,015,300 $ 434,000 $ 434,000 a. Prepare all consolidation entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8. b. Prepare a three-part consolidation worksheet for 20X8 in good form..
Income Statement
Sales
Less: COGS
Less: Wage expense
Less: Depreciation expense
Less: Interest expense
Less: Other expenses
Consolidated
Credit
December 31, 20X8
Price
Corporation
Saver
Company
Consolidation Entries
Debit
$
290,000 $ 198,000
151,000 ×
95,000 ×
(23,000) >
(12,000) x
28,000 ×
13,000
(3,200) X
15,000
7,000
25,500
20,000
20,500
S
488,000
246,000
(35,000)
44,200
22,000
45,500
(20,500)
Less: Impairment loss
Income from Saver Company
Net Income
$
486,500
$ 321,000 $
17,300
$
0
$
790,200
Statement of Retained Earnings
Beginning balance
$ 1,015,300
$ 434,000
S
1,449,300
Net income
Less: Dividends declared
486,500
9,300 ×
321,000
790,200
Ending Balance
$ 1,511,100
$
9,300 ×
764,300 $
18,600
0
0
S
2,258,100
Assets
Cash
$
22,500
$ 27,000 (
Accounts receivable
76,000
15,000
Inventory
96,000
31,000
Land
Buildings and equipment
Less: Accumulated depreciation
Investment in Saver Company
36,000
21,000 (
$
49,500
91,000
127,000
57,000
355,000 ×
156,000
(148,000)
(70,000)
511,000
(218,000)
148,300
(148,300)
Goodwill
5,500
Total Assets
$ 585,800
$ 180,000
$ (142,800)
0 $
5,500
623,000
Liabilities and Stockholders' Equity
Accounts payable
$
(75,000)
$(22,000) >
Wages payable
(23,000) >
(12,000) x
Notes payable
(156,000) x
(32,000) *
Common stock
(206,000) >
(60,000) >
Retained earnings
Total Liabilities and Fruity
$ (460 000)
Is (126 000)
0
S
0
0
Transcribed Image Text:Income Statement Sales Less: COGS Less: Wage expense Less: Depreciation expense Less: Interest expense Less: Other expenses Consolidated Credit December 31, 20X8 Price Corporation Saver Company Consolidation Entries Debit $ 290,000 $ 198,000 151,000 × 95,000 × (23,000) > (12,000) x 28,000 × 13,000 (3,200) X 15,000 7,000 25,500 20,000 20,500 S 488,000 246,000 (35,000) 44,200 22,000 45,500 (20,500) Less: Impairment loss Income from Saver Company Net Income $ 486,500 $ 321,000 $ 17,300 $ 0 $ 790,200 Statement of Retained Earnings Beginning balance $ 1,015,300 $ 434,000 S 1,449,300 Net income Less: Dividends declared 486,500 9,300 × 321,000 790,200 Ending Balance $ 1,511,100 $ 9,300 × 764,300 $ 18,600 0 0 S 2,258,100 Assets Cash $ 22,500 $ 27,000 ( Accounts receivable 76,000 15,000 Inventory 96,000 31,000 Land Buildings and equipment Less: Accumulated depreciation Investment in Saver Company 36,000 21,000 ( $ 49,500 91,000 127,000 57,000 355,000 × 156,000 (148,000) (70,000) 511,000 (218,000) 148,300 (148,300) Goodwill 5,500 Total Assets $ 585,800 $ 180,000 $ (142,800) 0 $ 5,500 623,000 Liabilities and Stockholders' Equity Accounts payable $ (75,000) $(22,000) > Wages payable (23,000) > (12,000) x Notes payable (156,000) x (32,000) * Common stock (206,000) > (60,000) > Retained earnings Total Liabilities and Fruity $ (460 000) Is (126 000) 0 S 0 0
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