Sales Accounts Consolidation Worksheet For the Year Ending December 31, 2024 Abbey Bellstar $ (1,020,000) $ (720,000) Cost of goods sold Operating expenses Equity in earnings of Bellstar Separate company net income Consolidated net income To noncontrolling interest To Abbey Company Retained earnings, Abbey, 1/1 Retained earnings, Bellstar, 1/1 Net income Dividends declared Retained earnings, 12/31 S 720,000 100,000 (81,000) 520,000 65,000 0 (281,000) $ (135,000) $ (1,338,000) (281,000) 135,000 (730,000) (135,000) 80,000 Debit Consolidation Entries Credit Noncontrolling Consolidated Interest Totals Cash Accounts receivable Inventory Investment in Bellstar Land Buildings and equipment (net) Trademark Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31 Noncontrolling interest 1/1 Noncontrolling interest 12/31 Total liabilities and equity $ (1,482,000) $ (785,000) S 191,000 $ 80,000 400,000 630,000 610,000 540,000 1,047,000 190,000 610,000 518,000 520,000 $ 2,956,000 $2,380,000 S (664,000) $ (955,000) (810,000) (540,000) (100,000) (1,482,000) (785,000) $ (2,958,000) $ (2,380,000) $ S 0 The Individual financial statements for Abbey Company and Bellstar Company for the year ending December 31, 2024, follow. Abbey acquired a 60 percent Interest in Bellstar on January 1, 2023, in exchange for various considerations totaling $960,000. At the acquisition date, the fair value of the noncontrolling Interest was $640,000 and Bellstar's book value was $1,280,000. Bellstar had developed Internally a trademark that was not recorded on its books but had an acquisition-date fair value of $320,000. This Intangible asset is being amortized over 20 years. Abbey uses the partial equity method to account for its Investment in Bellstar. Abbey sold Bellstar land with a book value of $65,000 on January 2, 2023, for $150,000. Bellstar still holds this land at the end of the current year. Bellstar regularly transfers Inventory to Abbey. In 2023, it shipped Inventory costing $259,000 to Abbey at a price of $370,000. During 2024, Intra-entity shipments totaled $420,000, although the original cost to Bellstar was only $273,000. In each of these years, 20 percent of the merchandise was not resold to outside parties until the period following the transfer. Abbey owes Bellstar $70,000 at the end of 2024. Items Sales Cost of goods sold Operating expenses Equity in earnings of Bellstar Net income Retained earnings, 1/1/24 Net income (above) Dividends declared Retained earnings, 12/31/24 Cash Accounts receivable Inventory Investment in Bellstar Land Buildings and equipment (net) Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/24 Total liabilities and equities Note: Parentheses Indicate a credit balance. Required: Abbey Company Bellstar Company $ (1,020,000) 720,000 100,000 (81,000) $ (281,000) $ (1,336,000) (281,000) 135,000 $ (1,482,000) $ 191,000 400,000 610,000 1,047,000 190,000 518,000 $ 2,956,000 $ (664,000) (810,000) Ө (1,482,000) $ (2,956,000) $ (720,000) 520,000 65,000 $ (135,000) $ (730,000) (135,000) 80,000 $ (785,000) $ 80,000 630,000 540,000 610,000 520,000 $ 2,380,000 $ (955,000) (540,000) (100,000) (785,000) $ (2,380,000) a. Prepare a worksheet to consolidate the separate 2024 financial statements for Abbey and Bellstar.

Sales Accounts Consolidation Worksheet For the Year Ending December 31, 2024 Abbey Bellstar $ (1,020,000) $ (720,000) Cost of goods sold Operating expenses Equity in earnings of Bellstar Separate company net income Consolidated net income To noncontrolling interest To Abbey Company Retained earnings, Abbey, 1/1 Retained earnings, Bellstar, 1/1 Net income Dividends declared Retained earnings, 12/31 S 720,000 100,000 (81,000) 520,000 65,000 0 (281,000) $ (135,000) $ (1,338,000) (281,000) 135,000 (730,000) (135,000) 80,000 Debit Consolidation Entries Credit Noncontrolling Consolidated Interest Totals Cash Accounts receivable Inventory Investment in Bellstar Land Buildings and equipment (net) Trademark Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31 Noncontrolling interest 1/1 Noncontrolling interest 12/31 Total liabilities and equity $ (1,482,000) $ (785,000) S 191,000 $ 80,000 400,000 630,000 610,000 540,000 1,047,000 190,000 610,000 518,000 520,000 $ 2,956,000 $2,380,000 S (664,000) $ (955,000) (810,000) (540,000) (100,000) (1,482,000) (785,000) $ (2,958,000) $ (2,380,000) $ S 0 The Individual financial statements for Abbey Company and Bellstar Company for the year ending December 31, 2024, follow. Abbey acquired a 60 percent Interest in Bellstar on January 1, 2023, in exchange for various considerations totaling $960,000. At the acquisition date, the fair value of the noncontrolling Interest was $640,000 and Bellstar's book value was $1,280,000. Bellstar had developed Internally a trademark that was not recorded on its books but had an acquisition-date fair value of $320,000. This Intangible asset is being amortized over 20 years. Abbey uses the partial equity method to account for its Investment in Bellstar. Abbey sold Bellstar land with a book value of $65,000 on January 2, 2023, for $150,000. Bellstar still holds this land at the end of the current year. Bellstar regularly transfers Inventory to Abbey. In 2023, it shipped Inventory costing $259,000 to Abbey at a price of $370,000. During 2024, Intra-entity shipments totaled $420,000, although the original cost to Bellstar was only $273,000. In each of these years, 20 percent of the merchandise was not resold to outside parties until the period following the transfer. Abbey owes Bellstar $70,000 at the end of 2024. Items Sales Cost of goods sold Operating expenses Equity in earnings of Bellstar Net income Retained earnings, 1/1/24 Net income (above) Dividends declared Retained earnings, 12/31/24 Cash Accounts receivable Inventory Investment in Bellstar Land Buildings and equipment (net) Total assets Liabilities Common stock Additional paid-in capital Retained earnings, 12/31/24 Total liabilities and equities Note: Parentheses Indicate a credit balance. Required: Abbey Company Bellstar Company $ (1,020,000) 720,000 100,000 (81,000) $ (281,000) $ (1,336,000) (281,000) 135,000 $ (1,482,000) $ 191,000 400,000 610,000 1,047,000 190,000 518,000 $ 2,956,000 $ (664,000) (810,000) Ө (1,482,000) $ (2,956,000) $ (720,000) 520,000 65,000 $ (135,000) $ (730,000) (135,000) 80,000 $ (785,000) $ 80,000 630,000 540,000 610,000 520,000 $ 2,380,000 $ (955,000) (540,000) (100,000) (785,000) $ (2,380,000) a. Prepare a worksheet to consolidate the separate 2024 financial statements for Abbey and Bellstar.

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 18E

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