Pop Corporation acquired 70 percent of Soda Company's voting
common shares on January 1, 20X2, for $112,700. At that date, the
noncontrolling interest had a fair value of $48,300 and Soda
reported $71,000 of common stock outstanding and retained earnings
of $31,000. The differential is assigned to buildings and
equipment, which had a fair value $28,000 higher than book value
and a remaining 10-year life, and to patents, which had a fair
value $31,000 higher than book value and a remaining life of five
years at the date of the business combination. Trial balances for
the companies as of December 31, 20X3, are as follows:
Pop Corporation | Soda Company | |||||||||||||||
Item | Debit | Credit | Debit | Credit | ||||||||||||
Cash & Accounts Receivable | $ | 16,400 | $ | 22,600 | ||||||||||||
Inventory | 166,000 | 36,000 | ||||||||||||||
Land | 81,000 | 41,000 | ||||||||||||||
Buildings & Equipment | 350,000 | 261,000 | ||||||||||||||
Investment in Soda Company | 117,200 | |||||||||||||||
Cost of Goods Sold | 187,000 | 80,800 | ||||||||||||||
Depreciation Expense | 20,000 | 15,000 | ||||||||||||||
Interest Expense | 17,000 | 6,200 | ||||||||||||||
Dividends Declared | 31,000 | 16,000 | ||||||||||||||
Accumulated Depreciation | $ | 141,000 | $ | 85,000 | ||||||||||||
Accounts Payable | 93,400 | 36,000 | ||||||||||||||
Bonds Payable | 219,250 | 94,000 | ||||||||||||||
Bond Premium | 1,600 | |||||||||||||||
Common Stock | 121,000 | 71,000 | ||||||||||||||
Retained Earnings | 128,900 | 61,000 | ||||||||||||||
Sales | 261,000 | 130,000 | ||||||||||||||
Other Income | 10,600 | |||||||||||||||
Income from Soda Company | 10,450 | |||||||||||||||
$ | 985,600 | $ | 985,600 | $ | 478,600 | $ | 478,600 | |||||||||
On December 31, 20X2, Soda purchased inventory for $31,500 and sold
it to Pop for $45,000. Pop resold $30,000 of the inventory (i.e.,
$30,000 of the $45,000 acquired from Soda) during 20X3 and had the
remaining balance in inventory at December 31, 20X3.
During 20X3, Soda sold inventory purchased for $56,000 to Pop for
$80,000, and Pop resold all but $25,000 of its purchase. On March
10, 20X3, Pop sold inventory purchased for $15,000 to Soda for
$30,000. Soda sold all but $7,800 of the inventory prior to
December 31, 20X3. Assume Pop uses the fully adjusted equity
method, that both companies use straight-line depreciation, and
that no property, plant, and equipment has been purchased since the
acquisition.
Required:
a. Prepare all consolidation entries needed to prepare a full set
of consolidated financial statements at December 31, 20X3, for Pop
and Soda. (If no entry is required for a transaction/event,
select "No journal entry required" in the first account
field.
Note: Enter debits before credits.
|
Note: Enter debits before credits.
|
Note: Enter debits before credits.
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Note: Enter debits before credits.
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Note: Enter debits before credits.
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Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for...
Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $112,700. At that date, the noncontrolling interest had a fair value of $48,300 and Soda reported $71,000 of common stock outstanding and retained earnings of $31,000. The differential is assigned to buildings and equipment, which had a fair value $28,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $31,000 higher than book value and a...
Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $109,200. At that date, the noncontrolling interest had a fair value of $46,800 and Soda reported $71,000 of common stock outstanding and retained earnings of $30,000. The differential is assigned to buildings and equipment, which had a fair value $20,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $35,000 higher than book value and a...
Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $118,300. At that date, the noncontrolling interest had a fair value of $50,700 and Soda reported $70,000 of common stock outstanding and retained earnings of $31,000. The differential is assigned to buildings and equipment, which had a fair value $24,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $44,000 higher than book value and a...
Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $109,200. At that date, the noncontrolling interest had a fair value of $46,800 and Soda reported $71,000 of common stock outstanding and retained earnings of $30,000. The differential is assigned to buildings and equipment, which had a fair value $20,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $35,000 higher than book value and a...
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Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $108,500. At that date, the noncontrolling interest had a fair value of $46,500 and Soda reported $70,000 of common stock outstanding and retained earnings of $30,000. The differential is assigned to buildings and equipment, which had a fair value $20,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $35,000 higher than book value and a remaining...