Advanced Financial Accounting
Answer the following questions completely, showing all work.
On Jan 1, 2011, Peter Piper's Corp purchased an 80% interest in the common stock of Suzy Q for $350,000.00 Sunflower had the following Balance Sheet on the date of acquisition:
Suzy Q's Corporation
Balance Sheet
Jan 1, 2011
Assets: Liabilities & Equity
Accounts Receivable $40,000 Accounts Payable $42,297
Inventory 20,000 Bonds Payable $100,000
Land 35,000 Discount on BP (2,297)
Buildings 250,000 Common Stk ($10 par) $10,000
Accumulated Depreciation (50,000) Paid in Capital $90,000
Equipment $120,000 Retained Earnings $115,000.
Accumulated Depreciation (60,000) Total $355,000
Total $355,000
A comparison of the FMV determined the following:
Inventory $25,000
Buildings $180,000 10 year life
Equipment $95,000 5 year life
Patent $25,000 10 year life
Bonds Payable $110,000 5 year life
Petunia and Sunflower had the following Trial Balances on Dec 31, 2013
|
|
Petunia
|
Sunflower |
|
Cash
|
$71,070
|
$32,032
|
|
Accounts Receivable
|
90,000
|
60,000
|
|
Inventory
|
100,000
|
30,000
|
|
Land
|
150,000
|
45,000
|
|
Investment in Sub
|
385,738
|
0 |
|
Computers
|
100,775
|
0 |
|
Buildings
|
500,000
|
250,000
|
|
Accumulated Depreciation
|
($300,000)
|
($70,000)
|
|
Equipment
|
200,000
|
120,000
|
|
Accumulated Depreciation
|
(100,000)
|
(84,000)
|
|
Accounts Payable
|
(55,000)
|
(25,000)
|
|
Bonds Payable
|
0
|
(100,000)
|
|
Discount on Bonds Payable
|
0
|
1,640
|
|
Common Stock
|
(100,000)
|
(10,000)
|
|
Paid-in Capital
|
(600,000)
|
(90,000)
|
|
Retained Earnings
|
(400,000)
|
(145,000)
|
|
Sales
|
(600,000)
|
(220,000)
|
|
Cost of Goods Sold
|
410,000
|
120,000
|
|
Depreciation Expense-Buildings
|
30,000
|
10,000
|
|
Depreciation Expense-Equipment
|
15,000
|
12,000
|
|
Other Expenses
|
110,000
|
45,000
|
|
Interest Revenue
|
(7,845)
|
0
|
|
Interest Expense
|
0
|
8,328
|
|
Subsidiary Income
|
(19,738)
|
0
|
|
Dividends Declared
|
20,000
|
10,000
|
|
Total
|
-0-
|
-o-
|
Prepare the worksheet necessary to produce the Consolidated Financial Statements for Petunia and Sunflower for the year ended Dec 31, 2013. Include the Determination and Distribution of Excess Schedule.
Notes for assignment
Prepare the worksheet necessary to produce the Consolidated Financial Statements for Petunia and Sunflower for the year ended Dec 31, 2013. Include the Determination and
1. Distribution of Excess Schedule.
2. Show all work and journal entries as to how you got the numbers on worksheet in accordance to generally accepted accounting principles (GAAP)
3. Remember to also fill out the Determination & Distribution of Excess Schedule. (Again show how all work was done & in accordance to generally accepted accounting principles (GAAP))
4. Eliminations and Adjustments: (where applicable) (show all work)
- Current year subsidiary income
- Current year dividend
- Eliminate controlling interest in subsidiary equity
- Distribute excess and NCI adjustment
- Amortize excess-building, equipment, Patent and Bonds Payable
- Eliminate intercompany sale during current period
- Eliminate intercompany unpaid trade account
- Defer beginning inventory profit
- Defer ending inventory profit
- Eliminate intercompany bonds