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Required: Determine consolidated totals for each of these account balances.

Required: Determine consolidated totals for each of these account balances.

FINANCIAL ACCOUNTING
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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Allison Corporation acquired 90 percent of Bretton on January 1, 2022. Of Bretton's total acquisition-date fair value, $65,100 was allocated to undervalued equipment (with a 10-year remaining life) and $86,800 was attributed to franchises (to be written off over a 20-year period). Since the takeover, Bretton has transferred inventory to its parent as follows: Remaining at Year- Year Cost Transfer Price End (at transfer 2022 2023 $50,100 53,100 75,375 price) $33,400 2024 $100,200 88,500 100,500 39,165 51,700 On January 1, 2023, Allison sold Bretton a building for $67,000 that had originally cost $93,800 but had only a $40,200 book value at the date of transfer. The building is estimated to have a five-year remaining life (straight-line depreciation is used with no salvage value). Selected figures from the December 31, 2024, trial balance of these two companies are as follows: Sales Allison $729,750 Bretton $417,000 Cost of Goods Sold 458,700 229,350 Operating Expenses 125,100 83,400 Inventory Investment Income Equipment (net) Buildings (net) Required: Not Given 0 218,925 93,825 145,950 144,000 384,000 224,000 Determine consolidated totals for each of these account balances. Intra-entity gross profit - Inventory 1/1/24 • Intra-Entity Gross Profit - Inventory 12/31/24 Determine consolidated totals for each of these account balances. Sales Cost of Goods Sold Operating Expenses Investment Income Inventory Equipment (net) Buildings (net) Intra-entity gross profit - Inventory 1/1/24 Gross Profit Gross Profit Rate Remaining Inventory Intra-Entity Gross Profit Intra-Entity Gross Profit - Inventory 12/31/24 Gross Profit Gross Profit Rate Remaining Inventory Intra-Entity Gross Profit Consolidated Totals $1,046,250 $587,550
Transcribed Image Text:Allison Corporation acquired 90 percent of Bretton on January 1, 2022. Of Bretton's total acquisition-date fair value, $65,100 was allocated to undervalued equipment (with a 10-year remaining life) and $86,800 was attributed to franchises (to be written off over a 20-year period). Since the takeover, Bretton has transferred inventory to its parent as follows: Remaining at Year- Year Cost Transfer Price End (at transfer 2022 2023 $50,100 53,100 75,375 price) $33,400 2024 $100,200 88,500 100,500 39,165 51,700 On January 1, 2023, Allison sold Bretton a building for $67,000 that had originally cost $93,800 but had only a $40,200 book value at the date of transfer. The building is estimated to have a five-year remaining life (straight-line depreciation is used with no salvage value). Selected figures from the December 31, 2024, trial balance of these two companies are as follows: Sales Allison $729,750 Bretton $417,000 Cost of Goods Sold 458,700 229,350 Operating Expenses 125,100 83,400 Inventory Investment Income Equipment (net) Buildings (net) Required: Not Given 0 218,925 93,825 145,950 144,000 384,000 224,000 Determine consolidated totals for each of these account balances. Intra-entity gross profit - Inventory 1/1/24 • Intra-Entity Gross Profit - Inventory 12/31/24 Determine consolidated totals for each of these account balances. Sales Cost of Goods Sold Operating Expenses Investment Income Inventory Equipment (net) Buildings (net) Intra-entity gross profit - Inventory 1/1/24 Gross Profit Gross Profit Rate Remaining Inventory Intra-Entity Gross Profit Intra-Entity Gross Profit - Inventory 12/31/24 Gross Profit Gross Profit Rate Remaining Inventory Intra-Entity Gross Profit Consolidated Totals $1,046,250 $587,550
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