Chapter 7, Exercise 5
Chapter 7, Exercise 5
Chapter 7, Exercise 5
Total 0
Total Assets
Company
imprlied fair Parent Price
Particulars valuealue (60%)
Fair Value of Subsidiary A 250,000 150,000
Less Book Value of Interest Acquired
Common Stock ($10 par) 100,000
Retained Earnings 20,000
Total Equity 120,000 120,000
Interest Acquired 60%
Book Value B 120,000 72,000
Excess of Cost over Book Value A-B 130,000 78,000
Adjustment of indentifiable accounts Adjustment Life
Equipment 130,000 10
150,000/60%=250,000
Assets:
Current assets 350,000
Long-lived assets:
Property, plant and eqipment
(740,000+240,000+130,000-(5*13,000 amortizacion) 1,045,000
Particular Amount
60% interest [ 60%x (120,000-20,000)] 60,000
20% interest [20% x (120,000-50,000)] 14,000
Share of retained earnings 74,000
Amrtizations:
2 years x 60% x 13,000 (15,600)
3 years x 80% x 13,000 (31,200)
Net adjustment (46,800)
Parent retained earnings balance, 31/12/2013 300,000
Total 327,200
100,000
120,000
40%
48,000
52,000
Amortization per year
13,000 Debit D
Liabilities and stockholders' Equity
Current liabilities 500,000
Bonds Payable
Stockholders' equity:
NCI 57,000
Common stock ($ 10) 500,000
Paid in capital in excess of par 10,800
Retained earning (Wna) 327,200 838,000
Total liabilities and stockholders' equity 1,395,000
Exercise 7-3
Determination and Distribution of
Excess Schedule
Company Value Parent Price NCI
Fair Value of Subsidiary
Less Book Value of Interest Acquired
Common Stock
Retained Earnings
Total Equity
Interest Acquired
Book Value
Excess of Cost over Book Value
Worksheet
Accounts Adjusted Distribution Amortization /year
Total 0
Cash 890,000
Investment in Bruce Corporation($864,000 – $12,000 + $26,000)
Gain on Sale of Subsidiary
Cash 455,000
Investment in Bruce Corporation [1/2 × ($864,000 – $12,000)] + $13,000
Gain on Sale of Investment
the sale and the gain on the 12,000 shares
of Bruce stock.
A sophisticated equity adjustment for the other half of the investment will be
necessary at year-end
(3) Only the 20% portion sold (25% of the investment) needs adjustment; the remaining 60% of
the investment will be adjusted at year-end when consolidated statements are prepared
Cash 232,500
Investment in Bruce Corporation [(1/4 × $864,000) – $3,000 + $6,500]
Paid-In Capital in Excess of Par
the sale and the gain on the 6,000 shares of
Bruce stock.
12,000
26,000
878,000
12,000
12,000
13,000
449,000
16,000
3,000
6,500
219,500
13,000
Exercise 7-6
Determination and Distribution of
Excess Schedule
Company Value Parent Price NCI
Fair Value of Subsidiary
Less Book Value of Interest Acquired
Common Stock
Retained Earnings
Prefered Dividends in Arrears
Total Equity
Interest Acquired
Book Value
Excess of Cost over Book Value
Worksheet
Accounts Adjusted Distribution Amortization /year
Total 0
Total 0
Total 0
Exercise 7-7
Determination and Distribution of
Excess Schedule
Company Value Parent Price NCI
Fair Value of Subsidiary
Less Book Value of Interest Acquired
Common Stock
Retained Earnings
Preferred Dividends in Arrears
Total Equity
Interest Acquired
Book Value
Excess of Cost over Book Value
Worksheet
Accounts Adjusted Distribution Amortization /year
Total 0
Net income
NCI share
Controlling share of sub. Income
Parent
Internally generated net income
Consolidated Worksheet
Company
Value Analysis First Implied Fair
Purchase Value Parent Price NCI Value
Price Paid
Fair Value of Net Assets
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Distribution of Excess
Schedule
Company
Value Parent Price NCI
Fair Value of Subsidiary
Less Book Value of Interest
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Accounts Adjusted Distribution
Total 0
Parent
Internally generated net income
Controlling share of subsidiary
Purchased Income
Controlling interest
Consolidated Worksheet
Trial Balance Eliminations
James Craft Dr Cr
Inventory, December 31 100,000 50,000
Other Current Assets 126,000 180,000
Investment in Craft Company 413,000
Parent
Internally generated net income
Adjustments
Gain on Acquisition
Controlling interest
Consolidated Worksheet
Trial Balance Eliminations
Away Stallward Dr
Cash 99,500 78,000
Notes Receivable 100,000
Total 0 0
Consolidated net income
NCI share
Controlling share
NCI
Controlling retained earnings
Totals
Total 0
Total 0
Parent
Internally generated net income
Controlling interest
Marsha Corporation and Subsidiary Transam Corporation
Worksheet for Consolidated Financial Statements
For Year Ended December 31, 2016
Determination and
Distribution of Excess
Schedule
Company
Value Parent Price NCI
Fair Value of Subsidiary
Less Book Value of Interest
Acquired
Common Stock
Retained Earnings
January 1 to June 20 Income
Total Equity
Interest Acquired
Book Value
Excess of Cost over Book Value
Worksheet
Accounts Adjusted Distribution Amortization/year
Total 0
Determination and
Distribution of Excess
Schedule
Company
Value Parent Price NCI
Fair Value of Subsidiary
Less Book Value of Interest
Acquired
Common Stock
Retained Earnings
Total Equity
Interest Acquired
Book Value
Excess of Cost over Book Value
Worksheet
Accounts Adjusted Distribution Amortization/year
Total 0
Total
NCI share
Controlling share
Motor
Internally generated net income
Total
NCI share
Controlling share
Parent
Internally generated net income
Controlling share of Boat
Controlling share of Motor
Amortizations
Total
Total 0
Total
Less Preferred Share
NCI share
Controlling share
Parent
Internally generated net income
Total
Determination and
Distribution of Excess
Schedule
Company
Value Parent Price NCI
Fair Value of Subsidiary
Less Book Value of Interest
Acquired
Common Stock
Retained Earnings
Preferred arrearage
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Accounts Adjusted Distribution Amortization/year
Total 0
Total 0
NCI
Totals
Consolidated
ations and Adjustments NCI Balance Sheet
Credit