On December 31, Year 3, Mueller Corp. acquired 80% of the outstanding shares of Wilson Inc. for a total cost of $240,000. The carrying amount of Wilson's assets, liabilities, and equity was equal to fair value except for the following: Inventory Equipment, net Patent Long-term debt Common shares Retained earnings Carrying Amount $ 60,000 270,000 180,000 175,000 42,000 Dividend income Net income Common shares Retained earnings Fair Value $ 68,000 276,000 40,000 160,000 As at December 31, Year 3, the equipment and patent had an estimated useful life of six and eight years, respectively. The long-term debt is due on January 1, Year 9. There was a goodwill impairment loss of $3,000 in Year 5. There were no other impairment losses. ? Mueller uses the cost method to account for its investment in Wilson. The book values of selected accounts for the year ended December 31, Year 7 were as follows: Wilson Mueller $ 12,000 62,000 $ 26,000 100,000 175,000 250,000 110,000 Required: (a) Prepare a schedule of changes to the acquisition differential for the four year period ending December 31, Year 7. (Leave no cells blank - be certain to enter "0" wherever required. Omit $ sign in your response. Negative/Deductible amounts should be indicated by a minus sign.)
On December 31, Year 3, Mueller Corp. acquired 80% of the outstanding shares of Wilson Inc. for a total cost of $240,000. The carrying amount of Wilson's assets, liabilities, and equity was equal to fair value except for the following: Inventory Equipment, net Patent Long-term debt Common shares Retained earnings Carrying Amount $ 60,000 270,000 180,000 175,000 42,000 Dividend income Net income Common shares Retained earnings Fair Value $ 68,000 276,000 40,000 160,000 As at December 31, Year 3, the equipment and patent had an estimated useful life of six and eight years, respectively. The long-term debt is due on January 1, Year 9. There was a goodwill impairment loss of $3,000 in Year 5. There were no other impairment losses. ? Mueller uses the cost method to account for its investment in Wilson. The book values of selected accounts for the year ended December 31, Year 7 were as follows: Wilson Mueller $ 12,000 62,000 $ 26,000 100,000 175,000 250,000 110,000 Required: (a) Prepare a schedule of changes to the acquisition differential for the four year period ending December 31, Year 7. (Leave no cells blank - be certain to enter "0" wherever required. Omit $ sign in your response. Negative/Deductible amounts should be indicated by a minus sign.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do not give image format
Transcribed Image Text:Required:
(a) Prepare a schedule of changes to the acquisition differential for the four year period ending December 31, Year 7. (Leave no cells
blank - be certain to enter "0" wherever required. Omit $ sign in your response. Negative/Deductible amounts should be indicated
by a minus sign.)
Inventory
Equipment (6 years)
Patents (8 years)
Long-term debt (5 years)
Goodwill
Balance
Dec. 1
Year 3
$
$
Year 4, 5&6
$
Changes
$
Consolidated net income attributable to the parent
Consolidated retained earnings
Non-controlling interest
Year 7
$
$
Balance
Dec. 31
Year 7
$
(b) Calculate consolidated net income attributable to the parent, ending retained earnings and non-controlling interest at December 31,
Year 7. (Omit $ sign in your response.)
$
$
$
Transcribed Image Text:On December 31, Year 3, Mueller Corp. acquired 80% of the outstanding shares of Wilson Inc. for a total cost of $240,000. The
carrying amount of Wilson's assets, liabilities, and equity was equal to fair value except for the following:
Inventory
Equipment, net
Patent
Long-term debt
Common shares
Retained earnings
Carrying
Amount
$ 60,000
270,000
180,000
175,000
42,000
Dividend income
Net income
Common shares
Retained earnings
Fair Value
$ 68,000
276,000
40,000
160,000
As at December 31, Year 3, the equipment and patent had an estimated useful life of six and eight years, respectively. The long-term
debt is due on January 1, Year 9. There was a goodwill impairment loss of $3,000 in Year 5. There were no other impairment losses.
Mueller uses the cost method to account for its investment in Wilson. The book values of selected accounts for the year ended
December 31, Year 7 were as follows:
?
?
Mueller
$ 12,000
62,000 $ 26,000
100,000
250,000
175,000
110,000
Wilson
Required:
(a) Prepare a schedule of changes to the acquisition differential for the four year period ending December 31, Year 7. (Leave no cells
blank - be certain to enter "0" wherever required. Omit $ sign in your response. Negative/Deductible amounts should be indicated
by a minus sign.)
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