Following are financial statements for Moore Company and Kirby Company for 2011:
| Moore | Kirby |
Sales | $ (800,000) | $ (600,000) |
Cost of goods sold | 500,000 | 400,000 |
Operating and interest expenses | 100,000 | 160,000 |
Net income | $ (200,000) | $ (40,000) |
Retained earnings, 1/1/11 | $ (990,000) | $ (550,000) |
Net income | (200,000) | (40,000) |
Dividends paid | 130,000 | -0- |
Retained earnings, 12/31/11 | $(1,060,000) | $ (590,000) |
Cash and receivables | $ 217,000 | $ 180,000 |
Inventory | 224,000 | 160,000 |
Investment in Kirby | 657,000 | -0- |
| Moore | Kirby |
Equipment (net) | 600,000 | 420,000 |
Buildings | 1,000,000 | 650,000 |
Accumulated depreciation—buildings | (100,000) | (200,000) |
Other assets | 200,000 | 100,000 |
Total assets | $ 2,798,000 | $ 1,310,000 |
Liabilities | $(1,138,000) | $ (570,000) |
Common stock | (600,000) | (150,000) |
Retained earnings, 12/31/11 | (1,060,000) | (590,000) |
Total liabilities and equity | $(2,798,000) | $(1,310,000) |
• Moore purchased 90 percent of Kirby on January 1, 2010, for $657,000 in cash. On that date, the 10 percent noncontrolling interest was assessed to have a $73,000 fair value. Also at the acquisition date, Kirby held equipment (4-year remaining life) undervalued on the financial records by $20,000 and interest-bearing liabilities (5-year remaining life) overvalued by $40,000. The rest of the excess fair value over book value was assigned to previously unrecognized brand names and amortized over a 10-year life.
• During 2010 Kirby earned a net income of $80,000 and paid no dividends.
• Each year Kirby sells Moore inventory at a 20 percent gross profit rate. Intra-entity sales were $145,000 in 2010 and $160,000 in 2011. On January 1, 2011, 30 percent of the 2010 transfers were still on hand and, on December 31, 2011, 40 percent of the 2011 transfers remained.
• Moore sold Kirby a building on January 2, 2010. It had cost Moore $100,000 but had $90,000 in accumulated depreciation at the time of this transfer. The price was $25,000 in cash. At that time, the building had a five-year remaining life.
Determine all consolidated balances either computationally or by using a worksheet.
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