Autumn Corporation purchased 80% of the stock in Fall Corporation on January 1, 2015, for $360,000. On that date, the fair value of the non-controlling interest was $90,000. The book value and fair value information for Fall Corporation on 1/1/15 is as follows:
|
Book Value
|
Fair Value
|
|
Cash
|
12,000
|
12,000
|
|
Accounts Receivable
|
30,000
|
30,000
|
|
Inventory
|
70,000
|
75,000
|
|
Land
|
50,000
|
65,000
|
|
PP&E
|
470,000
|
300,000
|
|
Accum. Depreciation
|
(235,000)
|
|
|
Accounts Payable
|
32,000
|
32,000
|
|
Common Stock
|
200,000
|
|
|
Retained Earnings
|
165,000
|
|
|
460,000
|
|
Additional Information:
Fall Corporation uses the FIFO inventory method.
PP&E had a remaining economic life of 10 years.
Fall Corporation reported the following year-end information in 2015:
|
Net Income
|
50,000
|
|
Dividends
|
15,000
|
Fall Corporation reported the following year-end information in 2016:
|
Net Income
|
80,000
|
|
Dividends
|
20,000
|
1) Prepare the journal entry for Autumn Corporation on 1/1/2015:
2) Prepare the journal entries for Autumn Corporation 12/31/2015:
3) Prepare the journal entries for Autumn Corporation 12/31/2016:
4) Prepare a conolidation worksheet for Autumn and Fall Corporations as of 12/31/2016 using the following information:
|
Autumn
|
|
|
Fall
|
|
Income Statement
|
|
|
Income Statement
|
|
|
Sales
|
750,000
|
|
Sales
|
150,000
|
|
Less: COGS
|
(425,000)
|
|
Less: COGS
|
(46,500)
|
|
Less: Depr. Expense
|
(45,000)
|
|
Less: Depr. Expense
|
(23,500)
|
|
Income from Fall Corp
|
58,800
|
|
|
|
|
Net Income
|
338,800
|
|
Net Income
|
80,000
|
|
|
|
|
|
|
Statement of RE
|
|
|
Statement of RE
|
|
|
Beg. RE
|
450,000
|
|
Beg. RE
|
200,000
|
|
Add: Net Income
|
338,800
|
|
Add: Net Income
|
80,000
|
|
Less: Dividends
|
(100,000)
|
|
Less: Dividends
|
(20,000)
|
|
End RE
|
688,800
|
|
End RE
|
260,000
|
|
|
|
|
|
|
Balance Sheet
|
|
|
Balance Sheet
|
|
|
Cash
|
350,000
|
|
Cash
|
100,000
|
|
Accounts Rec.
|
145,000
|
|
Accounts Rec.
|
72,000
|
|
Inventory
|
164,200
|
|
Inventory
|
65,000
|
|
Investment in Fall Corp
|
421,600
|
|
|
|
|
PP&E
|
400,000
|
|
PP&E
|
470,000
|
|
Less: Accum. Depr
|
(250,000)
|
|
Less: Accum. Depr
|
(282,000)
|
|
Land
|
100,000
|
|
Land
|
50,000
|
|
Total Assets
|
1,330,800
|
|
Total Assets
|
475,000
|
|
|
|
|
|
|
Accounts Payable
|
242,000
|
|
Accounts Payable
|
15,000
|
|
Common Stock
|
400,000
|
|
Common Stock
|
200,000
|
|
Retained Earnings
|
688,800
|
|
Retained Earnings
|
260,000
|
|
Total Liab. & Equity
|
1,330,800
|
|
Total Liab. & Equity
|
475,000
|