act 470 ct4

Anonymous
timer Asked: Jan 12th, 2019
account_balance_wallet $30

Question description

Option #1: Intercompany Transactions

Assume that a parent company acquired 100% of a subsidiary on 1/1/X1. The purchase price was $175,000 in excess of the subsidiary’s book value of net assets on acquisition date and the excess was assigned entirely to an unrecorded patent. The life of the patent is 10 years.
Assume the subsidiary sells inventory to the parent. The parent ultimately sells the inventory to outside customers. The following relates to the years X2 and X3:

Inventory SalesGP of unsold inventoryReceivable (Payable)
X3$103,300$29,441$41,320
X2$87,900$19,137$27,986

The financial statements for the parent and subsidiary for the year ended 12/31/X3 are attached in the Excel spreadsheet.

Submission Requirements:

ACT470_Mod04-Option01.xlsx Excel spreadsheet in the Module 4 folder:

  • Prepare the consolidated financial statements at 12/31/X3 by placing the appropriate entries in their respective debit/credit column cells.
  • Indicate, in the blank column cell to the left of the debit and credit column cells if the entry is a [C], [E], [A], [D] or [I]entry.
  • Use Excel formulas to derive the Consolidated column amounts and totals.
  • Using the “Home” key in Excel, go to the “Styles” area and highlight the [C], [E], [A], [D] or [I]entry cells in different shades.
  • Review the grading rubric following this assignment, to understand how you will be graded on this assignment. Reach out to your instructor if you have questions about the assignment.

Option #2: Intercompany Transactions

Assume a parent company acquired 100% of a subsidiary on 1/1/X1 at a purchase price that was $300,000 in excess of the subsidiary’s book value. Of that excess, $200,000 was assigned to an unrecorded patent that is being amortized over 10 years. The remaining $100,000 was assigned to goodwill. In the year X2, the subsidiary sold land to the parent for $100,000. The land was reported on the balance sheet of the subsidiary for $70,000 at the date of sale.

The financial statements for the parent and subsidiary for the year ended 12/31/X3 are attached in the Excel spreadsheet.

Submission Requirements:

Using the ACT470_Mod04-Option02.xlsx Excel spreadsheet in the Module 4 folder:

Tutor Answer

Perfectsolutions
School: UIUC

Find the attached completed work, If you have another one, please invite me to bid. Kindly give me a 5 star review to build my profile.

ACT470-Module 4-Option 1
Parent

Consolidation Entries
Dr

Subsidiary

Income Statement:
Sales
Cost of goods sold

8.220.000
(5.754.000)

1.549.500
(929.700)

Gross...

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Review

Anonymous
Good stuff. Would use again.

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