Question

Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid...

Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid $800,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $200,000 both before and after Miller’s acquisition.

On January 1, 2019, Taylor reported a book value of $674,000 (Common Stock = $337,000; Additional Paid-In Capital = $101,100; Retained Earnings = $235,900). Several of Taylor’s buildings that had a remaining life of 20 years were undervalued by a total of $89,800.

During the next three years, Taylor reports income and declares dividends as follows:

Year Net Income Dividends
2019 $ 79,000 $ 11,500
2020 103,500 17,400
2021 115,900 23,300

Determine the appropriate answers for each of the following questions:

1. On the parent company’s separate financial records, what would be the December 31, 2021, balance for the Investment in Taylor Company account under each of the following accounting methods?

  • The equity method.
  • The partial equity method.
  • The initial value method.

2. As of December 31, 2020, Miller’s Buildings account on its separate records has a balance of $932,000 and Taylor has a similar account with a $349,500 balance. What is the consolidated balance for the Buildings account?

3. What is the balance of consolidated goodwill as of December 31, 2021?

4. Assume that the parent company has been applying the equity method to this investment. On December 31, 2021, the separate financial statements for the two companies present the following information:

Miller Company Taylor Company
Common stock $ 582,500 $ 337,000
Additional paid-in capital 326,200 101,100
Retained earnings, 12/31/21 722,300 482,100

What will be the consolidated balance of each of these accounts?

* Please explain how you got to your answers with stated formulas.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

A (1).. depreciation as per IAS 16 Machine. Cost 10.8 million /24 years= 450000 per annum depreciation expense Year 2 deprica

(a) Machine = $10.8m $ 452 000 р ажилд дар - пр. 2Ч ye 4 yu = (1) 2 ч 500 00 Y 3 = rewall fv = (0) 0 00 до 10100000 7a ededly

of Asset . ASPE 31 ки у 3) 31 led lyty IAS to 2 Jan (yks) 97.20L [ - 108L-GL gu.SL GOL [IOPL- 13.52 IAS 16 1211 115.50L اولاIAS 16 il diff in profit deur from Byr Inwards profit at (11) diff in Shareholders ASPE fright will further on effect on redu

PLEASE LIKE THE ANSWER IF YOU FIND IT HELPFUL OR YOU CAN COMMENT IF YOU NEED CLARITY / EXPLANATION ON ANY POINT.

Add a comment
Know the answer?
Add Answer to:
Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2016. Miller paid...

    Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2016. Miller paid $800,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $200,000 both before and after Miller’s acquisition. On January 1, 2016, Taylor reported a book value of $674,000 (Common Stock = $337,000; Additional Paid-In Capital = $101,100; Retained Earnings = $235,900). Several of Taylor’s buildings...

  • Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid...

    Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid $872,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $218,000 both before and after Miller's acquisition. On January 1, 2019, Taylor reported a book value of $490,000 (Common Stock = $245,000; Additional Paid-In Capital = $73,500; Retained Earnings = $171,500). Several of Taylor's buildings...

  • Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2019. Miller paid $848,000 in cash to the owners of Taylor to acquire these shares.

     In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $212,000 both before and after Miller’s acquisition. On January 1, 2019, Taylor reported a book value of $492,000 (Common Stock = $246,000; Additional Paid-In Capital = $73,800; Retained Earnings = $172,200). Several of Taylor’s buildings that had a remaining life of 20 years were undervalued by a total of $65,600. During the next three years, Taylor reports income and declares dividends as follows: YearNet IncomeDividends2019$57,700$8,400202075,60012,700202184,60017,000 Determine the...

  • Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2016. Miller paid...

    Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2016. Miller paid $888,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $222,000 both before and after Miller’s acquisition. On January 1, 2016, Taylor reported a book value of $634,000 (Common Stock = $317,000; Additional Paid-In Capital = $95,100; Retained Earnings = $221,900). Several of Taylor’s buildings...

  • Miller Company acquired an 80 percent Interest In Taylor Company on January 1, 2019. Miller pald...

    Miller Company acquired an 80 percent Interest In Taylor Company on January 1, 2019. Miller pald $728,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $182,000 both before and after Miller's acquisition On January 1, 2019, Taylor reported a book value of $474.000 (Common Stock = $237,000; Additional Pald-in Capital = $71,100; Retained Earnings = $165.900). Several of Taylor's bulidings...

  • Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2016. Miller paid...

    Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2016. Miller paid $784,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $196,000 both before and after Miller's acquisition. On January 1, 2016, Taylor reported a book value of $768,000 (Common Stock = $384,000; Additional Paid-In Capital = $115,200; Retained Earnings = $268,800). Several of Taylor's buildings...

  • Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2016. Miller paid...

    Miller Company acquired an 80 percent interest in Taylor Company on January 1, 2016. Miller paid $720,000 in cash to the owners of Taylor to acquire these shares. In addition, the remaining 20 percent of Taylor shares continued to trade at a total value of $180,000 both before and after Miller's acquisition. On January 1, 2016, Taylor reported a book value of $774,000 (Common Stock-$387,000; Additional Paid-in Capital $116,100; Retained Earnings $270,900). Several of Taylor's buildings that had a remaining...

  • Miller Company acquired an 80 percent Interest In Taylor Company on January 1, 2016. MIller pald $776,000 In cash to th...

    Miller Company acquired an 80 percent Interest In Taylor Company on January 1, 2016. MIller pald $776,000 In cash to the owners of Taylor to acquire these shares. In addition, the remalning 20 percent of Taylor shares continued to trade at a total value of $194,000 both before and after Miller's acquisition. On January 1, 2016, Taylor reported a book value of $580,000 (Common Stock $290,000, Additional Paid-In Capltal $87,000; Retained Earnings $203,000). Several of Taylor's buildings that had a...

  • Please answer the Advanced Accounting questions below with explanations on how you solved for the answers....

    Please answer the Advanced Accounting questions below with explanations on how you solved for the answers. Thank you! 1. Matthew, Inc., owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee’s operations and decision making. On January 1, 2021, the balance in the Investment in Lindman account is $347,000. Amortization associated with this acquisition is $10,400 per year. In 2021, Lindman earns an income of $219,000 and declares cash dividends of...

  • Miller Corporation acquired 30% of the outstanding common stock of Crowell Corporation for $170,000 on January...

    Miller Corporation acquired 30% of the outstanding common stock of Crowell Corporation for $170,000 on January 1, 2019, and obtained significant influence. The purchase price of the shares was equal to their book value. During 2019, the following information is available for Crowell: Mar. 31 Declared and paid a cash dividend of $50,000. June 30 Reported semiannual earnings of $110,000 for the first half of 2019. Sept. 30 Declared and paid a cash dividend of $50,000. Dec. 31 Reported semiannual...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT