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Account Debit Credit

Marshall Company acquired Tucker Company. The fair value of Tucker's assets was $515,000. Marshall recorded a gain of $115,000 on the acquisition. Goodwill of $60,000 was recorded, which was allocated to inventory ($5,000), buildings ($30,000), and land ($20,000) through consolidation entries. The consolidated financial statements combined the accounts of Marshall and Tucker, after eliminating the investment in Tucker ($515,000).

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McKenzie W
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34 views4 pages

Account Debit Credit

Marshall Company acquired Tucker Company. The fair value of Tucker's assets was $515,000. Marshall recorded a gain of $115,000 on the acquisition. Goodwill of $60,000 was recorded, which was allocated to inventory ($5,000), buildings ($30,000), and land ($20,000) through consolidation entries. The consolidated financial statements combined the accounts of Marshall and Tucker, after eliminating the investment in Tucker ($515,000).

Uploaded by

McKenzie W
Copyright
© © All Rights Reserved
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Download as XLSX, PDF, TXT or read online on Scribd
Download as xlsx, pdf, or txt
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Fair Value Assets $ 515,000 20000+90000+140000+180000+220000+50000-40000-200000+5000+30000+2000

Less: FV Consideration $ 400,000 200000+(20000*10)


= Gain on Purchase $ 115,000

Account Debit Credit


Investment in Tucker $ 515,000
LT Liabilities $ 200,000
CS ($1 par) $ 20,000
APIC $ 180,000 200000-20000
Gain on investment $ 115,000

Account Debit Credit


Service Expense $ 30,000
Cash $ 30,000
APIC $ 12,000
Cash $ 12,000

FV Consideration $ 400,000
Less: BV $ (460,000)
= Excess BV $ (60,000)
ALLOCATIONS
Inventory $ 5,000
Buildings $ 30,000
Land $ 20,000 $ 55,000
40000-200000+5000+30000+20000
Marshall Company Tucker Company Consolidation Entries
Debit
Cash $ 18,000 $ 20,000
Receivables $ 270,000 $ 90,000
Inventory $ 360,000 $ 140,000 $ 5,000
Land $ 200,000 $ 180,000 $ 20,000
Buildings $ 420,000 $ 220,000 $ 30,000
Equipment $ 160,000 $ 50,000
Investment in Tucker $ 515,000 $ -

Total Assets $ 1,943,000 $ 700,000

Accounts Payable $ (150,000) $ (40,000)


LT Liabilities $ (630,000) $ (200,000)
CS $ (130,000) $ (120,000) $ (120,000)
APIC $ (528,000) $ -
RE $ (505,000) $ (340,000) $ (340,000)

Total L+SE $ (1,943,000) $ (700,000) $ (515,000)

18000=60000-30000-12000
460000=515000-5000-30000-20000
55000=5000+20000+30000
630000=430000+200000 LT Liabilities issued
130000=110000+(20000 stocks issued*1 par)
528000=360000+((20000 stocks * 10 fv)-(20000*1 par)) - 12000
505000=1943000-150000-630000-130000-528000
340000=700000-40000-200000-120000
Consolidation Entries Consolidation Totals
Credit
$ 38,000
$ 360,000
$ 505,000
$ 400,000
$ 670,000
$ 210,000
$ 460,000
$ 55,000
$ 2,183,000

$ (190,000)
$ (830,000)
$ (130,000)
$ (528,000)
$ (505,000)

$ 515,000 $ (2,183,000)

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