Question

Consolidation at Date Acquisition, Ownership <100%, FMV>BV.

Assume that a parent company acquires a 70% interest in a subsidiary for a purchase price of $1,078,000. The excess of total fair value of controlling and noncontrolling interests over book value is assigned to; a building (PPE net) that is worth $100,000 more than book value, an unrecorded patent valued at $200,000 and goodwill valued at $300,000. Goodwill is assigned proportionately to the controlling and noncontrolling interests.

• Prepare the consolidated balance sheet at the date of acquisition by placing the appropriate entries in their respective debit/credit column cells.
• Indicate, in the blank column cell to the left of the debit and credit column cells if the entry is an [E] or [A] entry.
• Use Excel formulas to derive the Consolidated column amounts and totals.
• Using the “Home” key in Excel, go to the “Styles” area and highlight the [E] and [A] entry cells in different shades.
• PLEASE SHOW WORK ON EACH CALCULATIONS

Consolidation at Date Acquisition, Ownership <100%, FMV>BV.

			Consolidation Entries
	Parent	Subsidiary		Dr		Cr	Consolidated
Cash	920,000	215,000					0
Accounts receivable	782,000	330,000					0
Inventory	1,100,000	425,000					0
Equity investment	1,078,000						0
Property, plant and equipment (PPE), net	5,400,000	800,000					0
Patent							0
Goodwill							0
Total assets	9,280,000	1,770,000					0
Current liabilities	810,000	330,000					0
Long-term liabilities	4,000,000	500,000					0
Common stock	920,000	90,000					0
Additional paid-in capital	700,000	120,000					0
Retained earnings	2,850,000	730,000					0
Noncontrolling interest							0
Total liabilities and equity	9,280,000	1,770,000		0		0	0

Answer 1