| Prepare consolidation worksheet entries for December 31, 2014, and December 31, 2015. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)
There should be ten entries and I solved the first few:
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(Solved Homework): ny’s stock on January 1, 2014. As of that date, Abernethy has the following trial balance:…
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| Step 1. |
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| Common Stock |
250,000.00 |
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| Additional Paid in capital |
50,000.00 |
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| Retained earnings account |
409,650.00 |
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| Stockholders Equity |
709,650.00 |
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| Purchase Consideration |
860,500.00 |
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| Less: Fvof net assets |
(709,650.00) |
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| Excess of purchase consideration over FV |
150,850.00 |
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| Overvalued Land ( 132000-90500) |
(15,000.00) |
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| Undervalued Equipment (352500-375000) |
22,500.00 |
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| Overvalued Buildings (287600-214000) |
(73,600.00) |
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| Remaining Attributed to goodwill |
84,750.00 |
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| Overvalued Land ( 132000-90500) |
(15,000.00) |
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| Undervalued Equipment (352500-375000) |
22,500.00 |
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| Overvalued Buildings (287600-214000) |
(73,600.00) |
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| Total Amount attributed to assets |
18,650.00 |
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| Total excess of purchase considerations over Fari value |
150,850.00 |
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| Less:Attributed to assets |
(18,650.00) |
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| Attributed to goodwill |
169,500.00 |
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| Step 2. |
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| Overvlaued Land: |
– |
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| Undervalued Equipment (22,500 useful life of 5 years) |
(4,500.00) |
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| Overvalued Building (73600 uselful life 4 years) |
18,400.00 |
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| Total Annual excess amortization |
13,900.00 |
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| Step 3. |
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| Entry S For elininating thetotal of stockholders account of subsidiary company: |
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| Common Stock (abernathy) |
250,000.00 |
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| Additional Paid in capital |
50,000.00 |
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| Retained earnings account (1/1/14) |
409,650.00 |
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| Investment in A. Co. |
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709,650.00 |
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| Step 4 |
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| The entry A will be passed to attribute the allocation of fair value to specific accounts at acquisition date. |
| Land |
15,000.00 |
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| Building |
73,600.00 |
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| Goodwill |
84,750.00 |
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| Equipment |
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22,500.00 |
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| Investment in A. Co. |
84,750.00 |
150,850.00 |
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173,350.00 |
173,350.00 |
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| Step 5. |
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| The entry I is passed by deiting equity in earnings of subsidiary company and eliminating the income accrual of $117,500 nd 13900 of amortization amount, and crediting the investment in A company |
| Equity in earnings of subsidiary |
103,600.00 |
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| Investment in A. Co. |
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103,600.00 |
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