Description
Part 2: Problem Solving - Consolidated Financials
Assume that on 1/1/X0, a parent company acquires a 70% interest in its subsidiary for a price at $480,000 over book value. The excess is assigned as follows:
Asset | Fair Value | Useful Life |
Patent | $320,000 | 8 years |
Goodwill | 160,000 | Indefinite |
70% of the goodwill is allocated to the parent.
Included in the attached Excel spreadsheet are the pre-consolidation financial statements for both the parent and the subsidiary.
Submission Requirements:
Using the ACT470_Mod08-Portfolio_Option01.xlsx Excel spreadsheet in the Module 8 folder:
- Prepare the consolidated financial statements at 12/31/X6 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.
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Explanation & Answer
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ACT470-Portfolio-Option 1
Consolidation Entrie
Parent
Income Statement:
Sales
Cost of Goods sold
Gross profit
Income (loss) from subsidiary
Operating expenses
Net Income
Consolidated NI attrib to NCI
Consolidated NI attrib to CI
6,000,000
(4,000,000)
2,000,000
112,000
(1,500,000)
612,000
...
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