Professional Documents
Culture Documents
Pinnacle
(7,000,000)
4,650,000
255,000
585,000
(50,000)
(1,560,000)
(190,000)
(5,000,000)
(1,560,000)
560,000
(6,000,000)
(1,350,000)
(190,000)
50,000
(1,490,000)
Cash
Accounts receivable
Inventory
Investment in Strata
433,000
1,210,000
1,235,000
3,200,000
165,000
200,000
1,500,000
Buildings (net)
Licensing agreements
Goodwill
Total Assets
5,572,000
2,040,000
1,800,000
Accounts payable
Long-term debt
Common stock - Pinnacle
Common stock - Strata
Retained earnings 12/31/13
Total Liabilities and OE
350,000
12,000,000
(300,000)
(2,700,000)
(3,000,000)
(6,000,000)
(12,000,000)
Strata
(3,000,000)
1,700,000
160,000
350,000
600,000
30,000
50,000
S 1,350,000
20,000
*C
240,000
50,000
85,000
*C
240,000
S 2,850,000
A 590,000
A
E
A
270,000
20,000
400,000
E
A
(715,000)
(2,000,000)
85,000
(1,500,000)
(1,490,000)
(5,705,000)
S 1,500,000
30,000
80,000
5,705,000
3,945,000
3,945,000
Consolidated
(10,000,000)
6,350,000
415,000
965,000
580,000
0
(1,690,000)
(5,240,000)
(1,690,000)
560,000
(6,370,000)
598,000
1,325,000
2,735,000
0
7,852,000
1,740,000
750,000
15,000,000
(930,000)
(4,700,000)
(3,000,000)
0
(6,370,000)
(15,000,000)
Land
..........................................
Buildings .........................................
Equipment .......................................
Customer List .................................
Total
..........................................
Allocation
$20,000
(30,000)
60,000
100,000
Annual excess
Life amortizations
10 yrs.
5 yrs.
20 yrs.
$(3,000)
12,000
5,000
$14,000
CONSOLIDATED TOTALS
Revenues = $850,000 (add the two book values)
Cost of goods sold = $380,000 (the accounts of both companies are
added together)
Depreciation expense = $179,000 (the accounts are added and include
the excess depreciation adjustment of $9,000)
Amortization expense = $5,000 (current amortization for customer list
recognized in acquisition)
Buildings (net) = $625,000 (add the two book values less the
acquisition-date fair value allocation [a $30,000 reduction] after
removing 5 years of amortization totaling $15,000)
Equipment (net) = $450,000 (add the two book values. The
acquisition-date fair value allocation is completely amortized at end
of current year)
Customer list = $75,000 ($100,000 original allocation less $25,000 [5
years of amortization])
Common stock = $300,000 (parent company balance only)
Additional paid-in capital = $50,000 (parent company balance only)
b. The method used by the parent is only important in determining the
parent's separate account balances (which are given here or are not
needed) or consolidation worksheet entries (which are not required in
a.)
30. (continued)
c. Consolidation entry S
Common Stock (Hill) ...........................
Additional Paid-in Capital (Hill) ..........
Retained Earnings 1/1 .........................
40,000
160,000
600,000
Consolidation entry A
Land ......................................................
20,000
Equipment (net) ...................................
12,000
Customer List (net) ..............................
80,000
Buildings (net) ................................
18,000
Investment in Hill ...........................
94,000
(To enter unamortized allocation balances as of beginning of
current year)
Consolidation entry I
Investment Income ..............................
86,000
Investment in Hill ...........................
86,000
(To remove equity income recognized during yearequity
method accrual of $100,000 [based on subsidiary's income]
less amortization of $14,000 for the year)
Consolidation entry D
Investment in Hill .................................
40,000
Dividends Paid ...............................
(To remove intra-entity dividend payments)
40,000
Consolidation entry E
Amortization Expense ..........................
5,000
Depreciation Expense ..........................
9,000
Buildings ..............................................
3,000
Equipment........................................
12,000
Customer List ..................................
5,000
(To recognize excess acquisition-date fair-value amortizations
for
the period)
31.
a.
$1,090,000
$950,000
240,000
1,190,000
$(100,000)
Santiago income
$(200,000)
Technology amortization ................
Equity earnings in Santiago ...........
40,000
$(160,000)
$1,190,000
160,000
(50,000)
$1,300,000
Trademarks
Patented technology
Equipment
Total assets
Liabilities
Common stock
Retained earnings, 12/31
Total liabilities and equity
Peterson
(535,000)
170,000
(100,000)
Santiago
(495,000)
155,000
-0-
Adj. &
125,000
(160,000)
(500,000)
140,000
-0(200,000)
(E) 40,000
(I) 160,000
305,000
-0(500,000)
(1,500,000)
(500,000)
200,000
(1,800,000)
(650,000)
(200,000)
50,000
(800,000)
(S) 650,000
(1,500,000)
(500,000)
200,000
(1,800,000)
190,000
1,300,000
300,000
-0-
100,000
300,000
610,000
2,500,000
200,000
400,000
300,000
1,200,000
(165,000)
(535,000)
(1,800,000)
(2,500,000)
(100,000)
(300,000)
(800,000)
(1,200,000)
Elim.
(D) 50,000
Consolidated
(1,030,000)
325,000
(100,000)
490,000
(D) 50,000
(A) 240,000
(I) 160,000
(S) 950,000
(A) 240,000
(E) 40,000
(S) 300,000
1,440,000
1,440,000
-0300,000
900,000
910,000
2,600,000
(265,000)
(535,000)
(1,800,000)
(2,600,000)
50,000
50,000
200,000
180,000
380,000
Royalty Agreements
Goodwill
Investment in Wolfpack
90,000
60,000
65,000
Investment in Wolfpack
Dividends Paid
35,000
Amortization Expense
Royalty Agreements
10,000
150,000
65,000
35,000
10,000
30,000
30,000
200,000
180,000
380,000**
32. (continued)
Royalty Agreements
Goodwill
Investment in Wolfpack
90,000
60,000
Dividend Income
Dividends Paid
35,000
Amortization Expense
Royalty Agreements
10,000
150,000
35,000
10,000