hw_template chapter 4
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hoyle chapter 4 templateTRANSCRIPT
Student Name: InstructorClass: McGraw-Hill
Problem 04-37
PADRE, INC. AND SIERRA CORPORATION
- Purchase price allocation and annual amortization
Acquisition-date subsidiary fair value $ 1,003,400 Book value of subsidiary (690,000)Fair value in excess of book value 313,400
Correct! Allocations to specific accounts based on difference between fair value and book value: Land $ 225,000 Buildings and equipment (24,000) Copyright 94,000 Notes payable 18,400 313,400 Total $ -
Correct!
Life ExcessAnnual excess amortizations: (years) Amortizations Buildings and equipment $ 24,000 10 $ (2,400) Copyright $ 94,000 20 4,700 Notes payable $ 18,400 8 2,300 Total $ 4,600
Correct!
Totals for the business combination for the year ending December 31, 2015PADRE, INC. AND SIERRA CORPORATION
Account Name Balance ExplanationRevenues $ 2,079,880
Correct!
Cost of goods sold $ 1,206,000 Correct!
Depreciation expense $ 283,200 Correct!
Amortization expense $ 10,800 Correct!
Interest expense $ 63,600 Correct!
Equity in income of Sierra $ - Correct!
Consolidated net income $ 516,280 Correct!
Net income attributable to NCI $ 44,280 Correct!
Net income to Padre Company $ 472,000 Correct!
Retained earnings, 1/1 $ 1,275,000 Correct!
Dividends declared $ 260,000 Correct!
Retained earnings, 12/31 $ 1,487,000 Correct!
Student Name: InstructorClass: McGraw-Hill
Problem 04-37
Current assets $ 1,620,860 Correct!
Investment in Sierra $ - Correct!
Land $ 650,000 Correct!
Buildings and equipment (net) $ 1,162,800 Correct!
Copyright $ 205,200 Correct!
Total assets $ 3,638,860 Correct!
Accounts payable $ 469,000 Correct!
Notes payable $ 700,900 Correct!
Noncontrolling interest in Sierra $ 231,960 Correct!
Common stock $ 300,000 Correct!
Additional paid-in capital $ 450,000 Correct!
Retained earnings, 12/31 $ 1,487,000 Correct!
Total liabilities & equities $ 3,638,860 Correct!
Student Name: InstructorClass: McGraw-Hill
Problem 04-37
PADRE, INC. AND SIERRA CORPORATION
Consolidation Worksheet
Non-
Consolidation Entries controlling Consolidated
Accounts Padre Sierra Debit Credit Interest Totals
Revenues (1,394,980) (684,900) (2,079,880) Correct!
Cost of goods sold 774,000 432,000 1,206,000 Correct!
Depreciation expense 274,000 11,600 [E] 2,400 283,200 Correct!
Amortization expense - 6,100 [E] 4,700 10,800 Correct!
Interest expense 52,100 9,200 [E] 2,300 63,600 Correct!
Equity in income of Sierra (177,120) - [ I ] 177,120 - Correct!
Separate company net income (472,000) (226,000)
Consolidated net income (516,280) Correct!
NI to noncontrolling interest (44,280) 44,280 Correct!
NI to Padre Company (472,000) Correct!
Retained earnings, 1/1 (1,275,000) (530,000) [S] 530,000 (1,275,000) Correct!
Net income (472,000) (226,000) (472,000) Correct!
Dividends declared 260,000 65,000 [D] 52,000 13,000 260,000 Correct!
Retained earnings, 12/31 (1,487,000) (691,000) (1,487,000) Correct!
Current assets 856,160 764,700 1,620,860 Correct!
Investment in Sierra 927,840 [D] 52,000 [S] 552,000
[ I ] 177,120
[A] 250,720 - Correct!
Land 360,000 65,000 [A] 225,000 650,000 Correct!
Buildings and equipment (net) 909,000 275,400 [E] 2,400 [A] 24,000 1,162,800 Correct!
Copyright - 115,900 [A] 94,000 [E] 4,700 205,200 Correct!
Total assets 3,053,000 1,221,000 3,638,860 Correct!
Accounts payable (275,000) (194,000) (469,000) Correct!
Notes payable (541,000) (176,000) [A] 18,400 [E] 2,300 (700,900) Correct!
NCI in Sierra 1/1 [S] 138,000
NCI in Sierra 12/31 [A] 62,680 (200,680)
(231,960) (231,960)
Common stock (300,000) (100,000) [S] 100,000 (300,000) Correct!
Additional paid-in capital (450,000) (60,000) [S] 60,000 (450,000) Correct!
Retained earnings, 12/31 (1,487,000) (691,000) (1,487,000) Correct!
Total liabilities and stockholders' equity (3,053,000) (1,221,000) 1,265,920 1,265,920 (3,638,860)
Correct! Correct! Correct!
Parentheses indicate a credit balance.
EXHIBIT 3.5Parrot Sun
Consolidation entriesAccounts DebitIncome StatementRevenues (910,000) (430,000)COGS 344,000 200,000 Depreciati 60,000 20,000 Amortizati 100,000 75,000 (E) 6,000 Interest e 70,000 45,000 (E) 5,000 Equity in s (64,000) 0 (I) 64,000 Separate c (400,000) (90,000)Consolidated net incomeNoncontrolling interest in Sub. IncomeNet income to controlling interest
Statement of RERE, 1/1/12 (860,000) (580,000) (S) 580,000 Net income (400,000) (90,000)Dividends 60,000 50,000 RE, 12/31/ (1,200,000) (620,000)
Balance SheetCurrent as 726,000 445,000 Investment 852,000 0 (D) 40,000
Trademark 304,000 295,000 (A) 60,000 Patent 880,000 540,000 (A) 114,000 Equipment( 390,000 160,000 (E) 1,000 Goodwill 0 0 (A) 25,000 Total asset 3,152,000 1,440,000 Long-term li (1,082,000) (590,000) (A) 35,000 Common st (870,000) (230,000) (S) 230,000
Noncontrolling interest in Sub. 1/1Noncontrolling interest in Sub. 12/31RE, 12/31/ (1,200,000) (620,000)Total liabil (3,152,000) (1,440,000)
Consolidation entriesNon-controlling interestConsolidated totalsCredit
(1,340,000)544,000
(E) 1,000 79,000 181,000 120,000
0 (416,000)
(16,000) 16,000 (400,000)
(860,000)(400,000)
(D) 40,000 10,000 60,000 (1,200,000)
1,171,000 (S) 648,000 0 (A) 180,000 (I) 64,000
659,000 (E) 6,000 1,528,000 (A) 9,000 542,000
25,000 3,925,000
(E) 5,000 (1,642,000)(870,000)
(S) 162,000 (A) 45,000 (207,000) (213,000)
(1,200,000)(3,925,000)