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    Jawaban Excersice Advance Chpt3

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    The document contains information from multiple exercises involving consolidated balance sheets and investments in subsidiaries. Part A shows Prince Company acquiring a 92% interest in Sun Company for $192,000. The consolidated balance sheet combines the assets and liabilities of Prince and its subsidiary. Part B involves Peach Company acquiring Swartz Company. The purchase price implies a value of $90,000 but the book value is $83,000, so $7,000 of goodwill is recorded on the consolidated balance sheet. Part C provides a consolidated balance sheet for Peach Company and its newly acquired subsidiary, including the $7,000 of goodwill from Part B.

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    Jawaban Excersice Advance Chpt3

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    teamjkt48merch
    69 views3 pages
    The document contains information from multiple exercises involving consolidated balance sheets and investments in subsidiaries. Part A shows Prince Company acquiring a 92% interest in Sun Company for $192,000. The consolidated balance sheet combines the assets and liabilities of Prince and its subsidiary. Part B involves Peach Company acquiring Swartz Company. The purchase price implies a value of $90,000 but the book value is $83,000, so $7,000 of goodwill is recorded on the consolidated balance sheet. Part C provides a consolidated balance sheet for Peach Company and its newly acquired subsidiary, including the $7,000 of goodwill from Part B.

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    Jawaban Excersice Advance Chpt3

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    The document contains information from multiple exercises involving consolidated balance sheets and investments in subsidiaries. Part A shows Prince Company acquiring a 92% interest in Sun Company for $192,000. The consolidated balance sheet combines the assets and liabilities of Prince and its subsidiary. Part B involves Peach Company acquiring Swartz Company. The purchase price implies a value of $90,000 but the book value is $83,000, so $7,000 of goodwill is recorded on the consolidated balance sheet. Part C provides a consolidated balance sheet for Peach Company and its newly acquired subsidiary, including the $7,000 of goodwill from Part B.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    69 views3 pages

    Jawaban Excersice Advance Chpt3

    Uploaded by

    teamjkt48merch
    The document contains information from multiple exercises involving consolidated balance sheets and investments in subsidiaries. Part A shows Prince Company acquiring a 92% interest in Sun Company for $192,000. The consolidated balance sheet combines the assets and liabilities of Prince and its subsidiary. Part B involves Peach Company acquiring Swartz Company. The purchase price implies a value of $90,000 but the book value is $83,000, so $7,000 of goodwill is recorded on the consolidated balance sheet. Part C provides a consolidated balance sheet for Peach Company and its newly acquired subsidiary, including the $7,000 of goodwill from Part B.

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    of 3

    Exercise 3-3

    Part A Investment in Sun Company 192,000


    Cash 192,000

    Part B PRUNCE COMPANY AND SUBSIDIARY


    Consolidated Balance Sheet
    January 2, 2014
    Assets
    Cash ($260,000 + $64,000 – $192,000) $132,000
    Accounts Receivable 165,000
    Inventory 171,000
    Plant and Equipment (net) 484,000
    Land ($63,000 + $32,000 + $28,333*) 123,333
    Total Assets $1,075,333

    Liabilities and Stockholders’ Equity


    Accounts Payable $151,000
    Mortgage Payable 111,000
    Total Liabilities 262,000
    Noncontrolling Interest ($192,000/0.9  0.1) $21,333
    Common Stock 400,000
    Other Contributed Capital 208,000
    Retained Earnings 184,000
    Total Stockholders’ Equity 813,333
    Total Liabilities and Stockholders’ Equity $1,075,333

    * [$192,000/0.9 – ($70,000 + $20,000 + $95,000)] = $28,333


    Exercise 3-4

    Part A Investment in Swartz Company ($60  1,500) 90,000


    Common Stock ($20  1,500) 30,000
    Other Contributed Capital ($40  1,500) 60,000

    Other Contributed Capital 1,700


    Cash 1,700
    Part B Computation and Allocation of Difference
    Parent Non- Entire
    Share Controlling Value
    Share
    Purchase price and implied value $90,000 0 90,000
    Less: Book value of equity acquired 83,000* 0 83,000
    Difference between implied and book value 7,000 0 7,000
    Goodwill (7,000) (0) (7,000)
    Balance -0- -0- -0-
    * $40,000 + $24,000 + $19,000 = $83,000

    Part C Peach Company and Subsidiary


    Consolidated Balance Sheet
    January 1, 2010
    Assets
    Cash ($73,000 + $13,000 - $1,700) $ 84,300
    Accounts Receivable 114,000
    Inventory 83,000
    Plant and Equipment 138,000
    Land 48,000
    Goodwill* 7,000
    Total Assets $ 474,300
    Liabilities and Stockholders’ Equity
    Accounts Payable $84,000
    Notes Payable 103,000
    Total Liabilities $187,000
    Common Stock ($100,000 + $30,000) $130,000
    Other Contributed Capital ($60,000 + $60,000 - $1,700) 118,300
    Retained Earnings 39,000
    Total Stockholders’ Equity 287,300
    Total Liabilities and Stockholders’ Equity $ 474,300

    * Cost of investment less fair value acquired equals goodwill or ($90,000 – $83,000 = $7,000).
    Recall that the book value of net assets equals the fair value of net assets in this problem.
    Exercise 3-6

    $37,412 Noncontrolling Interest


    Part A = 15% Noncontrolling Interest
    $249,412 Implied Value*

    * Implied Value = Parent’s value $212,000 + NCI $37,412 = $249,412

    Common Stock-Shipley 90,000


    Other Contributed Capital-Shipley 90,000
    Retained Earnings-Shipley 56,000
    Land $249,412 - $236,000 13,412
    Investment in Shipley Company 212,000
    Noncontrolling Interest 37,412

    Part B SHIPLEY COMPANY


    Balance Sheet
    December 31, 2013

    Cash $ 15,900
    Accounts Receivable 22,000
    Inventory 34,600
    Plant and Equipment 147,000
    Land ($220,412 - $13,412 - $120,000) 87,000
    Total Assets $ 306,500

    Accounts Payable $ 70,500


    Common Stock 90,000
    Other Contributed Capital 90,000
    Retained Earnings 56,000
    Total Equities $ 306,500

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