SOLUTION – Question 1
Calculate the goodwill resulting from the acquisition
Purchase Price Common shares Retained Earnings Acquisition differential Allocated to
Amortization table
Copyright By PowCoder代写 加微信 powcoder
Accounts Receivable Inventory Land Equipment Goodwill
19,20,21 years
155,000 Calculate opening consolidated retained earnings
Parent’s single entity retained earnings
unrealized opening inventory profit after tax
tax Parent’s adjusted Retained Earnings
Parent’s portion of GW loss Sub’s opening retained earnings
retained earnings at acquisition
unadjusted change FVD separately identified below
Sub’s adjusted RE
Consolidated RE
Calculate the opening NCI balance sheet account for 2022. NCI at acquisition
add equity pickup 268,250 less NCI share of GW loss in 2021 (40,000) NCI – opening 2022
Calculated Consolidated net income attributable to parent, NCI and Entity Parent’s net income
260,000 9,563
realize opening inventory profit less dividends
unrealized land profit – after tax
Parent’s adjusted net income Sub’s net income
Current year amortization – FV diff – land Current year amortization – FV diff – equipment
(62,000) 23,250 (38,750)
(40,000) (41,750)
425,000 10% 30%
Parent 70%
70,000 800,000
30,000 $ 330,000
Total 100%
100,000 $ 1,130,000
Accounts Receivable
Inventory (23,100) (9,900) Land 98,000 42,000 Equipment 43,400 18,600
Allocation of GW
$ 221,800 $ 82,200 73% 27%
current year ending 2022 balance
(140,000) 28,000 (112,000)
(40,000) 645,000
(375,000) 270,000
(20,000) (33,000) 28,000 23,250
100,000 25%
187,775 1,349,028
7,750 77,750
(12,750) 3,188
– (42,000)
(31,000) 264,000 191,000
$ 1,200,000
(9,563) 1,190,438
could do this way or separate like solution
195,000 70,000 7,750
(420,000) (180,000) (262,500) (112,500) 117,500 $ 37,500
(600,000) (375,000) 155,000
(20,000) (33,000)
140,000 62,000 304,000
(14,000) (6,000)
330,000 80,475
(10,816) 399,659
parent’s equity pickup
75,000 (75,000) 131,563
Unrealized inventory profit 210,000
after tax profit
73,500 18,375 55,125
Consolidated net income attributable to the parent Consolidated net income attributable to NCI
Entity Net Income
217,625 30% Prepare the eliminating entry to adjust the opening balance sheet amounts
Common stock Retained earnings Goodwill
Goodwill and NCI – INA method Goodwill under FVE
portion belonging to NCI GW under INA method NCI – FVE 399,659
600,000 645,000 264,000
65,288 portion of GW belonging to NCI
27% -27000
1,512,188 1,512,188
264,000 (71,384)
192,616 437,947
(71,384) 366,563
NCI – INA method
Equipment Inventory (opening) Investment in Sub Equity pickup
112,000 38,750 12,750
800,000 149,028 399,659
217,625 70%
152,338 283,900 65,288 349,188
SOLUTION – Question 2
Part 1 2019
Dr. Investment in Cash
To record the purchase of 35% of . Cash 35% 25000 Cr Dividend revenue
to record dividends
Dr. Investment in . Unrealized gain
To record the increase in value
new value $ 160 3,000 480,000
Note: 2020 entries were not required.
Investment Account Balance at Dec 31, 2020 $ 125 3,000
Journal entries for 2019 and 2020
Dr. Investment in Cash
To record the purchase of 35% of . Cash 35% 25000 Cr investment account balance
to record the receipt of dividends.
(45,500) 5,250
380,000 (8,750)
30,100 (7,700) (40,250)
Part 2 Part a
Dr Investment Account
Cr Equity income
Equity income
to record equity income 2020
to record the receipt of dividends. Dr Equity loss
Cr. Investment account
Cr. Extraordinary gain to record the equity loss
Equity Loss Extraordinary gain Total loss in the year
Investment Account Balance
35% (130,000) 35% 15,000
35% 22000 Cr investment account balance
2019 dividends
2019 equity income
2020 dividends
2020 equity loss (includes extraordinary gain) Investment Account Balance
程序代写 CS代考 加微信: powcoder QQ: 1823890830 Email: powcoder@163.com