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TRIAL BALANCES JANUARY 1, 2016 -
BEFORE
ACQUISITION
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John Corporation
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Carissa Inc.
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Christine Inc.
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Dr.
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Cr.
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Dr.
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Cr.
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Dr.
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Cr.
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Cash
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800,000
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20,000
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Accounts Receivable
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400,000
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50,000
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150,000
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Prepaid Expenses
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50,000
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-
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Inventory
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150,000
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50,000
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80,000
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Investment in Carissa Inc.
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Investment in Christine Inc.
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Land
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600,000
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150,000
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Buildings
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400,000
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200,000
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300,000
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Accum. Depr. Building
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100,000
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100,000
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100,000
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Cars and Trucks
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500,000
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400,000
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Accum. Depr. Cars and Trucks
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100,000
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150,000
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Patents
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60,000
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Accum. Amortization Patents
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10,000
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Trademarks
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Accum. Amortization Trademarks
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Accounts Payable
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850,000
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150,000
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100,000
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Accrued Expenses
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600,000
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50,000
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Short Term Debt
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700,000
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150,000
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100,000
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Common Stock at Par
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10,000
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10,000
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3,000
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Additional Paid in Capital
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240,000
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90,000
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47,000
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Retained Earnings
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350,000
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150,000
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200,000
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NCI in Net Assets of Carissa Inc.
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NCI in Net Assets of Christine Inc.
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2,960,000
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2,960,000
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850,000
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850,000
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550,000
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550,000
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On January 1, 2016, John made two acquisitions as follows:
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Carissa Inc.: John purchased 60% of Carissa Inc. for cash of $210,000. The NCI interests were proportional to CI.
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Carissa Inc. assets and liabilities were stated at fair value EXCEPT inventory (fair value $80,000) and
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Building (fair value $140,000)
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Christine Inc.: John purchased 80% of Christine Inc. for cash of $320,000. The NCI interests were proportional to CI.
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Christine Inc. assets and liabilities were stated at fair value EXCEPT Christine had unrecorded patents of $30,000,
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Building fair value of $250,000 and Inventory fair value of $90,000.
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ASSIGNMENT
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1. Prepare the Parent acquisition method computation of differential and goodwill for both acquisitions
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2. Prepare the Parent journal entries to record the acquisitions
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3. Prepare the consolidation worksheet at completion of the acquisitions (obviously you need to do part 3)
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4. Prepare the consolidation/elimination/reclassification entries needed to complete the worksheet
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5. Prepare a final consolidated balance sheet in good format (like a public company annual report)
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Note: answers to be submitted in both written format and excel used for consolidation.
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GGGGGu
1.docx
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