Need someone to do my class, BUS-FP4063, Accounting

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Exercise 1

Assessment 2: Consolidations
Exercise 1 Worksheet: Consolidated Balances
On January 1, 2015, the Prather Company purchased 80% of Sun Incorporated’s outstanding common stock for $1,360,000 cash. On that date, Sun’s total fair value, including the noncontrolling interest, was assessed at $1,700,000, even though Sun’s book value was only $1,200,000. Additionally, Sun’s financial records indicated several items, shown below, with differences between book values and fair values.
Table 1: Sun’s Book Values and Fair Values
Account Book Values Fair Values This cell intentionally left blank.
Land $ 120,000 $ 450,000 This cell intentionally left blank.
Building and equipment (life remaining: 10 years) $ 550,000 $ 500,000 This cell intentionally left blank.
Copyright (life remaining: 20 years) $ 200,000 $ 400,000 This cell intentionally left blank.
Notes payable (due in 8 years) $ (260,000) $ (240,000) This cell intentionally left blank.
For purposes of internal reporting, Prather used the equity method of accounting for this investment. The account balances for both companies are shown below in Table 2. Parentheses indicate credits.
Table 2: Account Balances for Year Ending December 31, 2015
Account Prather Sun This cell intentionally left blank.
Revenues $ (2,720,000) $ (1,080,000) This cell intentionally left blank.
Cost of goods sold $ 1,400,000 $ 770,000 This cell intentionally left blank.
Depreciation expense $ 520,000 $ 20,000 This cell intentionally left blank.
Amortization expense $ - $ 10,000 This cell intentionally left blank.
Interest expense $ 88,000 $ 10,000 This cell intentionally left blank.
Equity in Sun’s income $ (210,000) $ - This cell intentionally left blank.
Net income $ (922,000) $ (270,000) This cell intentionally left blank.
Retained earnings, January 1, 2015 $ (2,530,000) $ (880,000) This cell intentionally left blank.
Net income (above) $ (922,000) $ (270,000) This cell intentionally left blank.
Dividends paid $ 520,000 $ 130,000 This cell intentionally left blank.
Retained earnings, December 31, 2015 $ (2,932,000) $ (1,020,000) This cell intentionally left blank.
Current assets $ 1,930,000 $ 1,056,000 This cell intentionally left blank.
Investment in Sun $ 1,466,000 $ - This cell intentionally left blank.
Land $ 584,000 $ 120,000 This cell intentionally left blank.
Buildings and equipment (net) $ 1,754,000 $ 530,000 This cell intentionally left blank.
Copyright $ - $ 190,000 This cell intentionally left blank.
Total assets $ 5,734,000 $ 1,896,000 This cell intentionally left blank.
Accounts payable $ (382,000) $ (296,000) This cell intentionally left blank.
Notes payable $ (920,000) $ (260,000) This cell intentionally left blank.
Common stock $ (600,000) $ (200,000) This cell intentionally left blank.
Additional paid-in capital $ (900,000) $ (120,000) This cell intentionally left blank.
Retained earnings (see above) $ (2,932,000) $ (1,020,000) This cell intentionally left blank.
Total liabilities and equities $ (5,734,000) $ (1,896,000) This cell intentionally left blank.
For this business combination, use the acquisition method of accounting to determine consolidated balances. You may use Tables 3 and 4 below as worksheets.
Table 3. Worksheet
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Annual excess amortizations: This cell intentionally left blank.
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Consolidated Totals:
Revenues =
Cost of goods sold =
Depreciation expense =
Amortization expense =
Interest expense =
Equity in income of Sun =
Net income =
Retained earnings, 1/1 =
Noncontrolling interest in income of subsidiary =
Dividends paid =
Retained earnings, 12/31 =
Current assets =
Investment in Sun =
Land =
Buildings and equipment (net) =
Copyright =
Total assets =
Accounts payable =
Notes payable =
Noncontrolling interest in subsidiary =
Common stock =
Additional paid in capital =
Retained earnings, 12/31 =
Total liabilities and equities =
Table 4. Worksheet
This cell intentionally left blank. This cell intentionally left blank. This cell intentionally left blank. Consolidation Entries Noncontrolling Consolidated
Account Prather Sun Debit Credit Interest Totals
Revenues
Cost of goods sold
Depreciation expense
Amortization expense
Interest expense
Equity in income of Sun
Separate company net income
Consolidated net income
Noncontrolling interest in Sun's income
Controlling interest in CNI
Retained earnings 1/1
Net income (see above)
Dividends paid
Retained earnings 12/31
Current assets
Investment in Sun
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Land
Buildings and equipment (net)
Copyright
Total assets
Accounts payable
Notes payable
NCI in Sun 1/1
NCI in Sun 12/31
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Common stock
Additional paid-in capital
Retained earnings 12/31 (see above)
Total liability and stockholders' equity
End of Worksheet

Exercise 2

Assessment 2: Consolidations
Exercise 2 Worksheet: Intra-Entity Transfer Account Balances
On January 1, 2015, Panther Incorporated purchased 80% of the Staffer Company’s outstanding voting stock for $840,000 in cash and other considerations. On that date, Panther assessed the net fair value of Staffer’s identifiable liabilities and assets at $1,050,000. The 20% noncontrolling interest was assessed at a fair value of $210,000. Amortization of excess fair value over book value was not part of the acquisition. On December 31, 2016, each company’s financial records included the account balances shown below in Table 1.
Table 1: Account Balances for Year Ending December 31, 2016
Account Panther Staffer
Sales $ 1,280,000 $ 720,000
Cost of goods sold $ 580,000 $ 394,000
Operating expenses $ 300,000 $ 210,000
Retained earnings, January 1, 2016 $ 1,480,000 $ 360,000
Inventory $ 692,000 $ 220,000
Buildings (net) $ 716,000 $ 314,000
Investment income Not provided $ -
Compute selected balances based on the following three different intra-entity asset transfer scenarios:
1. Assume Panther sells Staffer inventory at a markup that equals 40% of the cost. In 2015, intra-entity transfers were $180,000. In 2016, they were $220,000. Of the inventory, Staffer retained, then sold, $56,000 of the 2015 transfers in 2016 and held $84,000 of the 2016 transfers until 2017. Determine the account balances for the accounts shown below that will appear on 2016 consolidated financial statements: • Cost of goods sold. • Inventory. • Noncontrolling interest in Staffer’s net income. You may use Table 2 below as a worksheet.
Table 2. Worksheet
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Consolidated Inventory Balance This cell intentionally left blank.
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Noncontrolling Interest in Staffer’s Net Income Balance This cell intentionally left blank.
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2. Assume Staffer sells inventory to Panther at a markup that equals 40% of the cost. In 2015, intra-entity transfers were $100,000. In 2016, they were $160,000. Of the inventory, Panther retained, then sold $42,000 of the 2015 transfers in 2016. Panther held $70,000 of the 2016 transfers until 2017. Determine the account balances for the accounts shown below that will appear on 2016 consolidated financial statements: • Cost of goods sold. • Inventory. • Noncontrolling interest in Staffer’s net income. You may use Table 3 below as a worksheet.
Table 3: Worksheet
Consolidated Cost of Goods Sold Balance This cell intentionally left blank.
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Consolidated Inventory Balance This cell intentionally left blank.
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Noncontrolling Interest in Staffer’s Net Income Balance This cell intentionally left blank.
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3. On January 1, 2015, Panther sells a building to Staffer for $160,000, even though the building’s book value on January 1 was only $100,000. The building’s remaining life was five years, with depreciation calculated under the straight-line method (no salvage value). Determine the account balances, for the accounts shown below, that will appear on 2016 consolidated financial statements: • Buildings (net). • Operating expenses. • Noncontrolling interest in Staffer’s net income. You may use Table 4 below as a worksheet.
Table 4: Worksheet
Consolidated Buildings (Net) Balance Balance
Consolidated Expenses Balance Balance
Noncontrolling Interest in Staffer's Net Income Balance Balance
End of Worksheet