Question

please help! also provide explanations to calculations!

Problem 4-28 (LO 4-1, 4-5, 4-6) Plaza, Inc., acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1, 2018. in exchange for $1,093,500 cash. At the acquisition date, Stanford's total fair value, including the noncontrolling Interest, was assessed at $1,366,875. Also at the acquisition date, Stanford's book value was $556,900. Several individual items on Stanford's financial records had fair values that differed from their book values as follows: Book Value $287,500 Fair Value $446,000 Tradenames (indefinite life) Property and equipment (net, 8-year remaining life) Patent (14-year remaining life) 230,400 143,100 250,400 179,500 For internal reporting purposes, Plaza, Inc, employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2018, for both companies $ Plaza (923, 800) 510,700 216, 600 Stanford S (704, 700) 316, 400 28,800 22,400 Revenues Cost of goods sold Depreciation expense Amortization expense Equity in income of Stanford Net income 0 (265, 600) (462, 100) $ S (337, 100) Retained earnings, 1/1/18 Net income Dividends declared Retained earnings, 12/31/18 $(1,019,300) (462,100) 239,800 $(1,241, 600) S (423, 300) (337, 100) 25,000 $(735, 400) < Prev 19 of 27 Next >

Answer 1

Fair value fo consideration Book value Excess of fair over book Assigned to $ $ $ 1,366,875 556,900 809,975 Amortization Life 158500 Indefinite 01 Tradenames (446000-287500) Property & Equip. (250400-230400) Patent (179500-143100) 20000 8 2500 36400 14 2600 Goodwill $ 595,075 Working (-337100+2500+2600)* 20% (88000+45600+423300)*80% (88000+45600+423300)*20% (158500+20000+36400+595075)*80% (158500+20000+36400+595075)* 20% 445520+265600+647980 66,400 445,520 111,380 647,980 161,995 1,359,100 $

NCI $ $ $ PLAZA CORPORATION AND STANFORD CORPORATION Consolidation Worksheet For Year Ending December 31, 2018 Consolidation Entries Plaza Stanford Debit Credit (923,800) $ (704,700) 510,700$ 316,400 216,600 $ 28,800 $ 2,500 $ 22,400 $ 2,600 (265,600) $ | $ 265,600 (462,100) $ (337,100) $ $ $ Consolidated Totals (1,628,500) 827,100 247,900 25,000 $ 55 500lls - $ $ $ (66,400) $ $ $ 423,300 L Account Revenues Cost of goods sold Depreciation expense Amortization expense Equity in income of Stanford Net income Consolidated net income NCI share of CNI Plaza share of CNI |Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 Current assets Investment in Stanford Tradenames Property and equipment Patents Goodwill Total assets Accounts payable Common stock Additional paid-in capital Noncontrolling interest (528,500) 66,400 (462,100) (1,019,300) (462,100)| 239,800 (1,241,600)| 1,032,800 $ 20,000 $ 5,000 $ (1,019,300) $ (462,100) $ 239,800 $ (1,241,600) $ 687,600 $ 1,339,100 $ 191,900 $ 823,600 $ - $ $ $ $ $ $ $ $ $ $ $ I $ $ $ $ | 1,359,100 (423,300) $ (337,100) 25,000 (735,400) 345,200 - $ 287,500 $ 201,600 $ 120,700 $ $ 955,000 (86,000) (88,000) $ (45,600) $ 20,000 158,500 20,000 36,400 595,075 $ | $ $ $ $ $ $ 2,500 2,600 3,042,200 $ (113,500) $ (239,700) $ (1,447,400) $ 637,900 1,042,700 154,500 595,075 3,462,975 (199,500) (239,700) (1,447,400) $ $ $ $ 88,000 45,600 $ $ 111,380 161,995 $ Retained earnings, 12/31 Total liabilities and equities $ $ (1,241,600) $ (3,042,200) $ (735,400) (955,000) $ (273,375) $ $ $ (334,775) (1,241,600) (3,462,975) 1,657,575 $ 1,657,575