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Problem 5-4

Name of Company Being Acquired	Stark Company Carol Fischer: Insert Name of Company Being Acquired in this Cell.
Name of Acquiring Company	Pontiac Company Carol Fischer: Insert the Name of the Acquiring Company in this cell.
Date of Acquisition	January 1,2014 Carol Fischer: Insert the Date of Acquisition in this Cell.			Current Year
	Date of Acquisition			Trial Balance
	Stark Company			Pontiac Company	Stark Company
	Book	Market Carol Fischer: Insert all market values even if they are the same as the fair values.	Life
Assets
Cash Carol Fischer: Insert Current Assets in Cell A8 through A13. Cell A8 is reserved for Cash.
Accounts Receivable Carol Fischer: Reserved for Accounts Receivable
Inventory
Investment in Subsidiary
Intercompany Bond Investment
Land Carol Fischer: Row 16 is reserved for the Land Account.
Buildings Carol Fischer: Row 17 is reserved for a Depreciable Fixed Asset
Accumulated Depreciation Carol Fischer: Reserved for Accumulated Depreciaion.
Equipment Carol Fischer: Reserved for a Depreciable Fixed Asset
Accumulated Depreciation Carol Fischer: Reserved for Accumulated Depreciation
Goodwill
Total Assets	-	-
Liabilities
Accounts Payable Carol Fischer: Rows 31, 32, and 33 are reserved for Current Liabilities.
Bonds Payable Carol Fischer: Rows 34, 35, and 36 are reserved for Long-Term Liabilities. Row 24 is for Bonds or Long-Term Notes Payable and Row 35 is for any premium or disount on the notes or bonds. The Life should be place in Row 35.
	Carol Fischer: Insert the Date of Acquisition in this Cell.	Carol Fischer: Insert all market values even if they are the same as the fair values.	Carol Fischer: Insert Current Assets in Cell A8 through A13. Cell A8 is reserved for Cash.	Carol Fischer: Reserved for Accounts Receivable	Carol Fischer: Do Not insert an account in this cell.	Carol Fischer: Row 16 is reserved for the Land Account.	Carol Fischer: Row 17 is reserved for a Depreciable Fixed Asset	Carol Fischer: Reserved for Accumulated Depreciaion.	Carol Fischer: Reserved for a Depreciable Fixed Asset	Carol Fischer: Reserved for Accumulated Depreciation	Carol Fischer: Reserved for a Depreciable Fixed Asset.	Carol Fischer: Reserved for Accumulated Depreciation	Carol Fischer: Rows 23 and, 24, are reserved for intangibles other than goodwill. This intangible may have differing book and market values.	Carol Fischer: Reserved for an Intangible other than goodwill where book and market values are identical.	Carol Fischer: This Cell should be left Blank	Carol Fischer: Rows 31, 32, and 33 are reserved for Current Liabilities.	Discount on Bonds Payable
Total Liabilities	-	-
Equity Acquired Company
Common Stock
Paid-in Capital in Excess of Par
Retained Earnings
Equity Acquiring Company
Common Stock
Paid-in Capital in Excess of Par
Retained Earnings
Total Equity	-
Total Liabilities and Equity	-
Net Assets at Market of Acquired Co.		-
Dividends Declared Acquired Company
Dividends Declared Acquiring Company
Sales
Cost of Goods Sold
Depreciation Expense of
Buildings
Equipment
-
Amortization Expense of
-
-
-
Other Expenses
Interest Expense
Gain on Sale of Assets
Interest Revenue
Subsidiary Income
Total	Balances			Balances	Balances
Purchase Price
Cash
Number of shares exchanged
Par value of a share of stock
Market value of a share of stock
Market value of stock exchanged	-
Total purchase price	-
Ownership Interest enter as .7 for 70%
Goodwill Applicable to NCI
Implied Value of NCI Interest	ERROR:#DIV/0!
Estimated Value of NCI interest if not the implied proportional amount--Enter amount or 0	- 0
Method of Accounting for Investment--Enter Capital C for Cost or Capital E for Equity	E
Years since Acquisition
Intercompany Merchandise Information
	Parent Sales	Parent %	Subsidiary Sales	Subsidiary %
Current Year Sales
Unpaid Account Balance, at year end
Beginning Inventory
Ending Inventory
Intercompany Fixed Asset Sales
		By Parent	By Sub
Type of Fixed Asset--Enter in Columns B or C
Enter 1 for	Land
Enter 2 for	Buildings
Enter 3 for	Equipment
Profit Amount
Life of Asset--leave blank for land
Year of Sale (Assume Beginning of Year)
Intercompany Bond Information
Maturity Value
Face Interest Rate (Enter .08 for 8%,.075 for 7.5%)
Original Years to Maturity
Year Bond Issued (Assume January Issuance)
Issue Rate
Year Bond Purchased (Assume January Purchase))
Purchase Rate (if effective interest amortization)
Face Value Purchased
Method of Amortization (Enter capital S for Straight-line and capital E for Effective Interest in Column B.)
Issue Price
Purchase Price
If the bonds were purchased the current year enter 1. If the bonds were purchased in a previous year enter 2.
Month Interest Paid January =1, December=12)
Value Analysis
	Company Fair Value	Parent Price	NCI Value
Company Fair Value	ERROR:#DIV/0!	-	ERROR:#DIV/0!
Fair Value of Net Assets Excluding Goodwill	-	-	-
Goodwill	ERROR:#DIV/0!	-	ERROR:#DIV/0!
Gain on Acquisition	ERROR:#DIV/0!
Determination and Distribution of Excess Schedule
	Implied Company Value	Parent Price	NCI Value
Fair Value of Company	ERROR:#DIV/0!	-	ERROR:#DIV/0!
Less Book Value of Interest Acquired
Common Stock	-
Paid-in Capital in Excess of Par	-
Retained Earnings	-
Total Equity	-
Interest Acquired		- 0	1.00
Book Value		0	-
Excess of Fair Value over Book Value		-	ERROR:#DIV/0!
Elimination Entry			Key
Common Stock	-		EL
Paid-in Capital in Excess of Par	-		EL
Retained Earnings	-		EL
Investment in Subsidiary		- 0	EL
Adjustment to Identifiable Accounts	Debit (Credit)	Key	Life
Inventory	-	D	-
-	-	D	-
Land	-	D
Buildings	-	D	-
Equipment	-	D	-
-	-	D	-
-	-	D	-
-	-	D	-
Goodwill	ERROR:#DIV/0!	D	-
Bonds Payable	-	D	-
Discount on Bonds Payable	-	D	-
-	-	D	-
Investment in Subsidiary	-	D
Gain Taken to Acquiring Co. RE/Income	ERROR:#DIV/0!	D
Acquired Company RE	ERROR:#DIV/0!	D
Check	ERROR:#DIV/0!
Amortization Schedule
Account Adjustment	Annual Amount	Current Year	Prior Years	Total
Inventory				-
Buildings				-
Equipment				-
-				-
-				-
-				-
Discount on Bonds Payable				-
-				-
Total		0	0
Amortization Entry	Debit (Credit)	Key
Cost of Goods Sold		A
Depreciation Expense of		A
Buildings		A
Equipment		A
-		A
Amortization Expense of		A
-		A
-		A
Interest Expense		A
Acquired Company RE	-	A
Acquiring Company RE	-	A
Inventory	-	A
Accumulated Depreciation	-	A
Accumulated Depreciation	-	A
-	-	A
-	-	A
-	-	A
Discount on Bonds Payable	-	A
-	-	A
Total	-
Method Adjustment Schedule	Debit (Credit)	Key
Is Adjustment Necessary?	NO
Adjustment to Investment Account	-	CV
Adjustment to Retained Earnings Account	-	CV
Date Alignment Schedule	Debit (Credit)	Key
Adjustment to Subsidiary Income Account	-	CY
Adjustment to Subsidiary Dividend Account	-	CY
Adjustment to Investment Account under Equity Method	-	CY
Intercompany Inventory Profit Deferral and Intercompany Sales and Receivables.
	Sold by Parent	Parent %	Parent Profit	Sold by Subsidiary	Subsidiary %	Subsidiary Profit
Beginning Inventory	-	0.00	-	-	0.00	-
Ending Inventory	-	0.00	-	-	0.00	-
Current Year Sales	-			-
Year End Unpaid Account Balances	-			-
Elimination Entries	Debit (Credit)	KEY
Eliminate Intercompany Merchandise Sales
Sales	-	IS
Cost of Goods Sold	-	IS
Eliminate Intercompany unpaid trade balance at year end
Accounts Payable	-	IA
Accounts Receivable	-	IA
Eliminate Profit made by parent on merchandise in subsidiary's beginning inventory
Retained Earnings-Parent	-	BI
Cost of Goods Sold	-	BI
Eliminate Profit made by parent on merchandise in subsidiary's ending inventory
Cost of Goods Sold	-	EI
Inventory	-	EI
Eliminate Profit made by subsidiary on merchandise in parents' beginning inventory
Retained Earnings-Parent	-	BI
Retained Earnings-Subsidiary	-	BI
Cost of Goods Sold	-	BI
Eliminate Profit made by subsidiary on merchandise in parents' ending inventory
Cost of Goods Sold	-	EI
Inventory	-	EI
Intercompany Fixed Asset Profit Deferral	Sale by Parent	Sale by Sub
Original Profit	-	-
Life of Asset	-	-
Annual Depreciation Adjustment	-	-
Realized in Prior Years	-	-
Balance at Start of Year	-	-
Realized in Current Year	-	-
Elimination Entry	Debit (Credit)	Key
Retained Earnings Parent	-	F
Gain on Sale of Asset	-	F
Retained Earnings Parent	-	F
Retained Earnings Subsidiary	-	F
Gain on Sale of Asset	-	F
-	-	F
-	-	F
Depreciation Expense	-	F
Depreciation Expense	-	F
-	-	F
-	-	F
Check	-
Intercompany Bond Eliminations
Amortization Table For	Stark Company			Pontiac Company
Period (First line is January 1- year of issuance. Second line is December 31- year of issuance.)	Cash/Payable	Interest	Balance	Period	Cash/Payable	Interest	Balance
0			-	0			-
0	-	ERROR:#DIV/0!	ERROR:#DIV/0!	0	-	-	-
1	-	ERROR:#DIV/0!	ERROR:#DIV/0!	1	-	-	-
2	-	ERROR:#DIV/0!	ERROR:#DIV/0!	2	-	-	-
3	-	ERROR:#DIV/0!	ERROR:#DIV/0!	3	-	-	-
4	-	ERROR:#DIV/0!	ERROR:#DIV/0!	4	-	-	-
5	-	ERROR:#DIV/0!	ERROR:#DIV/0!	5	-	-	-
6	-	ERROR:#DIV/0!	ERROR:#DIV/0!	6	-	-	-
7	-	ERROR:#DIV/0!	ERROR:#DIV/0!	7	-	-	-
8	-	ERROR:#DIV/0!	ERROR:#DIV/0!	8	-	-	-
9	-	ERROR:#DIV/0!	ERROR:#DIV/0!	9	-	-	-
Elimination Entries	Debit (Credit)	Key	Proof:
Bonds Payable	-	B	Loss Remaining at Year End
Interest Revenue	-	B		Investment in Bonds at End of Period	0
Loss (Gain) on Bond Retirement	-	B		Carrying Value at End of Period	0	0
(Premium) Discount on Bonds Payable	-	B
Retained Earnings Parent	-	B	Loss Amortized During the Year	Interest Expense Eliminated	0
Retained Earnings Subsidiary	-	B		Interest Revenue Eliminated	0	0
Interest Expense	-	B		Loss (Gain) or RE Adjustment at Beginning of Period		0
Intercompany Bond Investment	-	B
Check	Balances
Interest Payable	-	B
Interest Receivable	-	B
Consolidated Worksheet
	Trial Balance		Eliminations
	Pontiac Company	Stark Company	Key	Debit	Credit	Key	Consolidated Net Income	Non Control Interest	Controlling Retained Earnings	Consolidated Balance Sheet
Cash	-	-								-
Accounts Receivable	-	-			0	IA				-
Inventory	-	-			0	EI				-
					0	EI
-	-	-			0	B				-
-	-	-								-
-	-	-								-
Investment in Subsidiary	-	-			0	EL				-
			D	0	0	D
			CV	0	0	CV
			CY	0	0	CY
Intercompany Bond Investment	-	-			0	B				-
Land	-	-		0	0	D				-
					0	F
					0	F
Buildings	-	-	D	0	0	D				-
					0	F
					0	F
Accumulated Depreciation	-	-	A	0	0	A				-
			F	0
			F	0
Equipment	-	-	D	0	0	D				-
					0	F
					0	F
Accumulated Depreciation	-	-	A	0	0	A				-
			F	0
			F	0
-	-	-	D	0	0	D				-
-	-	-	A	0	0	A				-
-	-	-	D	0	0	D				-
			A	0	0	A
-	-	-	D	0	0	D				-
			A	0	0	A
-	-	-								-
Goodwill	-	-	D	ERROR:#DIV/0!	ERROR:#DIV/0!	D				ERROR:#DIV/0!
Accounts Payable	-	-	IA	-						-
-	-	-	B	0						-
-	-	-								-
Bonds Payable	-	-	D	0	0	D				-
			B	0
Discount on Bonds Payable	-	-	D	0	0	D				-
			A	0	0	A
			B	0	0	B
-	-	-	D	0	0	D				-
			A	0	0	A
Common Stock	-	-	EL	-				-
Paid-in Capital in Excess of Par	-	-	EL	-				-
Retained Earnings	-	-	EL	-	ERROR:#DIV/0!	D		ERROR:#DIV/0!
			A	-	0	A
			BI	-
			F	0
			B	0	0	B
Common Stock	-	-								-
Paid-in Capital in Excess of Par	-	-								-
Retained Earnings	-	-			ERROR:#DIV/0!	D			ERROR:#DIV/0!
			A	0	0	A
			CV	-	0	CV
			BI	-
			BI	-
			F	-
			F	-
			B	-	0	B
Dividends Declared Acquired Company	-	-			-	CY		-
Dividends Declared Acquiring Company	-	-							-
Sales	-	-	IS	-			-
Cost of Goods Sold	-	-	A		-	A	-
					-	IS
					-	BI
					-	BI
			EI	-
			EI	-
Depreciation Expense of	-	-					-
Buildings	-	-	A		0	A	-
					0	F
					0	F
Equipment	-	-	A		0	A	-
					0	F
					0	F
-	-	-	A		0	A	-
Amortization Expense of	-	-					-
-	-	-	A		0	A	-
-	-	-	A		0	A	-
-	-	-					-
Other Expenses	-	-					-
Interest Expense	-	-	A		-	A	-
					-	B
Subsidiary Income	-	-	CY	0	0	CY	-
Interest Revenue	-	-	B	0			-
Gain on Sale of Assets	-	-	F	-			-
			F	-
Gain on Acquisition of Business					ERROR:#DIV/0!	D	ERROR:#DIV/0!
Loss (Gain) on Bond Retirement			B	0	0	B	-
Total	Balances	Balances		ERROR:#DIV/0!	ERROR:#DIV/0!
Consolidated Net Income							ERROR:#DIV/0!
NCI Share							-	-
Controlling Share							ERROR:#DIV/0!		ERROR:#DIV/0!
NCI								ERROR:#DIV/0!		ERROR:#DIV/0!
Controlling Retained Earnings									ERROR:#DIV/0!	ERROR:#DIV/0!
										ERROR:#DIV/0!
Income Distribution Schedules	Stark Company
Internally Generated Net (Income) or Loss	-
Beginning Inventory Profit	-
Ending Inventory Profit	-
Gain on Asset in Income	-
Realized Gain on Asset Sale	-
Current Year Amortizations	0
Gain/Loss on Bond Retirement	0
Interest Adjustment on Bonds	0
Adjusted (Income) or Loss	-
NCI Share	-
Controlling Share	-
	Pontiac Company
Internally Generated Net Income	-
Gain on Acquisition of Business	ERROR:#DIV/0!
Beginning Inventory Profit	-
Ending Inventory Profit	-
Gain on Asset in Income	-
Realized Gain on Asset Sale	-
Controlling Share of Subsidiary	-
Total	ERROR:#DIV/0!
Consolidated Net Income	ERROR:#DIV/0!