Accounting Consolidation Guide
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AlexAccounting Consolidation Guide
Uploaded by
AlexName: Fe C.
Leyros BSA 2 ACCTG TTh 3:00-4:30 PM
Solutions:
PROBLEM 1:
Price Paid 1,530,000
*NCI 170,000
Total Fair Value 1,700,000
Less: Fair value of net acquired:
Cash 100,000
Accounts receivable 200,000
Inventories 450,000
Property and equipment 1,000,000
Current liabilities (300,000)
Long-term Liabilities (500,000) 950,000
Goodwill (1) 750,000
(2) NCI = 1,530,000/ 90% = 1,700,000 x 10% = 170,000
PROBLEM 2:
(1)
Papa Corp (BV) 3,800,000
Goodwill 50,000
Mama Corp. 850,000
Total Assets 4,700,000
(2)
Consideration Given (400x130) 520,000
Add: NCI (520,000/80%) x20% 130,000
Total 650,000
Less: FVNA (850,000-250,000) 600,000
Goodwill 50,000
PROBLEM 3:
80% 20%
Fair value of subsidiary 630,000 500,000 130,000
Less: Book value of interest acquired
Ordinary shares 100,000
Additional paid in capital 200,000
Retained earnings 230,000
Total equity 530,000 530,000 530,000
Interest acquired 80% 20%
Book value 424,000 106,000
Excess 100,000 76,000 24,000
Adjustment of identifiable accounts
Inventory (20,000)
Land (10,000)
Building 50,000
Equipment 60,000
Notes payable (50,000)
Goodwill 130,000
2. Prepare the working paper elimination entries. (6 pts.)
Write your entries here:
Ordinary shares- Jing co. 100,000
Additional paid in capital- Jing co. 200,000
Retained earnings- Jing co. 230,000
Investment in Jing co. 424,000
Non-controlling interest 106,000
Inventory 20,000
Land 10,000
Notes payable 50,000
Goodwill 130,000
Investment in Jing co. 76,000
Non-controlling interest 24,000
Building 50,000
Equipment 60,000
(3)
Dranreb Co. Jing co. Debit Credit Total
Assets
Cash 300,000 50,000 350,000
Accounts receivable 200,000 100,000 300,000
Inventory 200,000 80,000 20,000 300,000
Total current asset 950,000
Land 100,000 50,000 10,000 160,000
Building 600,000 400,000 50,000 950,000
Equipment 800,000 200,000 60,000 940,000
Investment in Jing co. 500,000 424,000
76,000 -
Goodwill 130,000 130,000
Total NCA 2,180,000
Total assets 2,700,000 880,000 3,130,000
Liabilities & shareholder’s equity
Accounts payable 150,000 60,000 210,000
Notes payable 290,000 50,000 240,000
Total liabilities 450,000
Ordinary shares -
Dranreb corp 1,500,000 1,500,000
Jing Co. 100,000 100,000 -
Additional Paid in capital -
Dranreb Corp -
Jing Co. 200,000 200,000 -
Retained earnings -
Dranreb Corp 1,050,000 1,050,000
Jing Co. 230,000 230,000 -
Shareholder’s equity excluding non-controlling interest 2,550,000
Non-controlling interest 106,000
24,000 130,000
Total liabilities 2,700,000 880,000 740,000 740,000 3,130,000
& shareholder’s equity
PROBLEM 4:
(1) Current assets 106,000
(2) Current assets (166,000-106,000) 60,000
Property & Equipment (net) (380,000-270,000) 110,000
Current liabilities (78,000-65,000) (13,000)
Total 157,000
PROBLEM 5:
Cash Consideration 1,240,000
Cash 120,000
Inventory 300,000
Property & equipment 760,000
1,180,000
Liabilities 240,000
Net assets of FV (1) 940,000
Good will (2) 300,000
PROBLEM 6:
(1)
APIC, Mother Corporation 6,500,000
Add: APIC (100,000x80) 8,000,000
Total APIC, Consolidated 14,500,000
(2)
Ordinary Share (100,000x100) 10,000,000
APIC (100,000x80) 8,000,000
Increase in equity 18,000,000
PROBLEM 7:
Peter Sandy Eliminations Consolidated
Corporation Company
Assets
CA
Current Assets (-720k) 1,800,000 650,000 -11,000 1,719,000
NCA
Land 1,200,000 600,000 1,800,000
Building & equipment (net) 2,500,000 400,000 2,900,000
Long-term investment
in marketable securities 500,000 320,000 820,000
Goodwill 250,000 + 240,000 490,000
Total Non-Current Assets 6,010,000
CL
Current liabilities 1,300,000 400,000 1,700,000
Other liabilities 800,000 610,000 1,410,000
Total Current Liabilities 3,110,000
SHE
Ordinary share 1,000,000 1,000,000
Additional paid-in capital 1,700,000 -6,000 1,694,000
Retained earnings 1,450,000 - 5,000 1,445,000
Total 4,139,000
NCI 480,000
Price Paid 720,000
NCI 480,000
Total 1,200,000
FVNA: 960,000
Goodwill 240,000
FVNA:
650,000
600,000
400,000
320,000
1,970,000
(400,000)
(610,000)
960,000
