Question

 Project: Using Microsoft Excel, prepare CONSOLIDATION WORKSHEET (spreadsheet) for Salmon and

Perch. See project details below.
o On December 31, 20X8, Defoe Corporation acquired 80 percent of Crusoe Company's common

stock for $104,000 cash. The fair value of the non-controlling interest at that date was determined to be $26,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:

On that date, the book values of Crusoe's assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and buildings and equipment, which had a fair value of $100,000. At December 31, 20X8, Defoe reported accounts payable of $15,000 to Crusoe, which reported an equal amount in its accounts receivable.

 Requirements:
1. Provide the consolidating entries needed to prepare a consolidated balance sheet immediately

following the business combination.
2. Prepare a consolidated balance sheet worksheet.

ile Edit View Go Tools Window Help 0 8 8% Sat 10:47 AM a KMARKS ACC413 Online Studies Student Syllabus.pdf (page 11 of 13) Q Search Project: Using Microsoft Excel, prepare CONSOLIDATION WORKSHEET (spreadsheet) for Salmon and Perch. See project details below. o On December 31, 20X8, Defoe Corporation acquired 80 percent of Crusoe Company's common stock for $104,000 cash. The fair value of the non-controlling interest at that date was determined to be $26,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Cash Accounts Receivable Inventory Land Defoe Crusoe Corporation Company $90,000 $20,000 80,000 35,000 100,000 40,000 40,000 60,000 300,000 100,000 (100,000) (40,000) 104,000 $614,000 $215,000 $120,000 $30,000 200,000 100,000 50,000 25,000 244,000 60.000 On that date, the book values of Crusoe's assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and buildings and equipment, which had a fair value of $100,000. At December 31, 20X8, Defoe reported accounts payable of $15,000 to Crusoe, which reported an equal amount in its accounts receivable. Buildings and Equipment Less: Accumulated Depreciation Investment in Crusoe Company Stock Total Assets Accounts Payable Mortgage Payable Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Store • Requirements: 1. Provide the consolidating entries needed to prepare a consolidated balance sheet immediately following the business combination. 2. Prepare a consolidated balance sheet worksheet. sing Label

Answer 1

ANSWER:

(1) Journal entries

Description	Debit	Credit
Common stock - Crusoe company	$25,000
Retained earnings	$60,000
Differential	$45,000
To Investment in Crusoe -company stock		$104,000
To Non controlling interest		$26,000
Inventory	$5,000
Building $ Equipment	$40,000
To Differential		$45,000

Account payable	$15,000
To Account receivable		$15,000

Consolidated Balance Sheet

Item	Dofoe Corp	Crusoe corp	Debit	Credit	Consolidated
Cash	$90,000	$20,000			$110,000
Accounts receivable	80,000	35,000		(3) 15,000	100,000
Inventory	100,000	40,000	(2) 5000		145,000
Land	40,000	60,000			100,000
Buildings & Equipment	300,000	100,000	(2) 40,000		440,000
Investment in Crusoe- company stock	104,000			(1) 104,000
Differential			(1) 45,000	(2) 45,000
Total Debits	$714,000	$255,000			$895,000
Accumulated Depreciation	100,000	40,000			$140,000
Accounts payable	120,000	30,000	(3) 15,000		$135,000
Mortgage payable	200,000	100,000			300,000
Common Stock
Dofoe Corp	50,000				50,000
Crusoe corp		25,000(1)	25,000
Non controlling interest				(1) 26,000	26,000
Total liabilities	$714,000	$255,000	$190,000	$190,000	$895,000

(2) Dofoe Corporation and Subsidiary Consolidated Balance Sheet

Cash                                                                                                            $110,000 Accounts receivable                                                                                   100,000 Inventory                                                                                                       145,000 Land                                                                                                              100,000 Buildings & Equipment       $440,000 Less: Accumulated dep     ($140,000)                                                        300,000                                                                                                                       $755,000 Accounts payable                                                                                      $135,000 Mortagage payable                                                                                      300,000 Stockholder's Equity : Controlling interest: Common stock                         $50,000 Retained earnings                    244,000 total controlling interest         $294,000 Non controlling interest              26,000 Total stockholder's Equity                                                                          $320,000 Total stockholder's Equity And liabilities                                                 $755,000

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