Python acquired 75% of Slither's stock for $316 million in cash on January 2, 2015. The fair value of the noncontrolling interest in Slither was $89 million. Slither's book value at that time was $120 million. The assets and liabilities reported on Slither's balance sheet had balances that approximated fair value at the date of acquisition. However, Slither had previously unreported developed technology (10 year life, straight-line), valued at $40 million. There has been no impairment loss on the developed technology since acquisition. Goodwill was impaired $6 million in 2015, and a $3 million impairment loss should be recorded for 2016. It is now December 31, 2016. The trial balances of Python and Slither appear below. (in thousands) Current assets Plant assets, net Python Dr (Cr) $ 113,500 Slither Dr (Cr) $ 35,000 1,200,000 500,000 Investment in Slither 323,800 Liabilities (1,342,950) (387,000) Capital stock (40,000) (20,000) Retained earnings, Jan. 1 (215,000) (110,000) Accumulated other comprehensive income, Jan. 1 (15,000) (10,000) Treasury stock 5,000 Sales revenue (400,000) (100,000) Equity in net income of Slither (2,100) Equity in OCI of Slither (2,250) Cost of goods sold 250,000 35,000 Amortization and depreciation expense 40,000 15,000 Other operating expenses 95,000 40,000 Other comprehensive income (5,000) (3,000) Total S 0 $ 0 Provide the consolidated financial statements as of December 31, 2016.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Python acquired 75% of Slither's stock for $316 million in cash on January 2, 2015. The fair value
of the noncontrolling interest in Slither was $89 million. Slither's book value at that time was
$120 million. The assets and liabilities reported on Slither's balance sheet had balances that
approximated fair value at the date of acquisition. However, Slither had previously unreported
developed technology (10 year life, straight-line), valued at $40 million.
There has been no impairment loss on the developed technology since acquisition. Goodwill was
impaired $6 million in 2015, and a $3 million impairment loss should be recorded for 2016.
It is now December 31, 2016. The trial balances of Python and Slither appear below.
(in thousands)
Current assets
Plant assets, net
Python
Dr (Cr)
$ 113,500
Slither
Dr (Cr)
$ 35,000
1,200,000
500,000
Investment in Slither
323,800
Liabilities
(1,342,950)
(387,000)
Capital stock
(40,000)
(20,000)
Retained earnings, Jan. 1
(215,000)
(110,000)
Accumulated other comprehensive income,
Jan. 1
(15,000)
(10,000)
Treasury stock
5,000
Sales revenue
(400,000)
(100,000)
Equity in net income of Slither
(2,100)
Equity in OCI of Slither
(2,250)
Cost of goods sold
250,000
35,000
Amortization and depreciation expense
40,000
15,000
Other operating expenses
95,000
40,000
Other comprehensive income
(5,000)
(3,000)
Total
S
0
$
0
Provide the consolidated financial statements as of December 31, 2016.
Transcribed Image Text:Python acquired 75% of Slither's stock for $316 million in cash on January 2, 2015. The fair value of the noncontrolling interest in Slither was $89 million. Slither's book value at that time was $120 million. The assets and liabilities reported on Slither's balance sheet had balances that approximated fair value at the date of acquisition. However, Slither had previously unreported developed technology (10 year life, straight-line), valued at $40 million. There has been no impairment loss on the developed technology since acquisition. Goodwill was impaired $6 million in 2015, and a $3 million impairment loss should be recorded for 2016. It is now December 31, 2016. The trial balances of Python and Slither appear below. (in thousands) Current assets Plant assets, net Python Dr (Cr) $ 113,500 Slither Dr (Cr) $ 35,000 1,200,000 500,000 Investment in Slither 323,800 Liabilities (1,342,950) (387,000) Capital stock (40,000) (20,000) Retained earnings, Jan. 1 (215,000) (110,000) Accumulated other comprehensive income, Jan. 1 (15,000) (10,000) Treasury stock 5,000 Sales revenue (400,000) (100,000) Equity in net income of Slither (2,100) Equity in OCI of Slither (2,250) Cost of goods sold 250,000 35,000 Amortization and depreciation expense 40,000 15,000 Other operating expenses 95,000 40,000 Other comprehensive income (5,000) (3,000) Total S 0 $ 0 Provide the consolidated financial statements as of December 31, 2016.
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education