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How Chapter 4 Aid

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MGT 136 HOW Chapter 4 Name Input ID # MGT 136 HOW Chapter 4 Facts and Requirements On January 1, 2017, Posh Company buys 100 % of the voting stock of Spice Inc. for $150 million in cash. After the acquisition, the trial balance of each company (in millions) at January 1, 2017, along with the fair value of Spice assets and liabilities and and their remaining useful lives, is: Trial Balance Current assets Investment in Spice Property and equipment, net Intangible assets Current liabilities Long-term debt Equity Total Posh 46 150 25 14 (29) (38) (168) - Spice 9 26 21 (7) (8) (41) - Spice Fair Value 9 38 16 (7) (8) Useful Lives 6 years 5 years Goodwill resulting from the acquisition was $102 million. During 2017 Spice has net income of $10 million and pays dividends of $1 million. The pre-closing trial balance of each company (in millions) at December 31, 2017 is: 2017 Current assets Investment in Spice Property and equipment, net Intangible assets Current liabilities Long-term debt Equity Dividends Sales revenue Cost of goods sold Operating expenses Equity in net income Total Posh Spice $ 52 $ 14 158 33 28 12 19 (31) (6) (35) (5) (168) (41) 1 (151) (127) 96 45 43 72 (9) $ - $ - Requirements: 1. 2. 3. Calculate equity in net income for Posh for 2017. Prepare the equity method entries for the Posh books for 2017. Prepare the 12/31/17 eliminating entries (C, E, R and O). 4. 5. 6. Prepare the consolidation working papers at December 31, 2017. Prepare the consolidate ...
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