On 1/1/16 the Able Company purchased 1000 of the 10000outstanding

OnLY NEED Problem Number 7Problem 1:On 1/1/16 the Able Company purchased 1000 of the 10000outstanding shares of Baker Company for $40,000. With this 10%record this investment as available for sale. 7/1/16 Baker Company paid a $2 per share dividend 12/31/16 Baker reported income of $80,000 and its stock was selling for $38 per share. On 1/1/17 Able purchased another 1500 shares of Baker at $39 per share. With this second purchase, Able now has influencAll Baker’s assets had book values equal to their market values 7/1/17 Baker paid a $2 per share dividend 12/31/17 Baker reported income of $90,000 and its stock was selling for $43 per share 7/1/18 Baker paid a $2 per share dividend 12/31/18 Baker reported a loss of $10,000 and its stock was selling for $42 per share. 1/1/19 Able sold 2000 of its shares in Baker at $42 per share. Able no longer has influence over Baker 7/1/19 Baker paid a $1 per share dividend 12/31/19 Baker reported income of $22000 and its stock was selling for $45 per share REQUIRED: MAKE ALL THE JOURNAL ENTRIES ABLE MAKES DUE TO ITS INVESTMENT IN BAKER FOR 2016, 2017, 2018 and 2019 pany for $40,000. With this 10% ownership, Able has no influence of Baker and Able has elected to purchase, Able now has influence over Baker R FOR 2016, 2017, 2018 and 2019. The GAGA and BIEBER COMPANIES had the following balance sheets on 1/1/2016GAGACASH 500000 ACCOUNTS RECEIVABLE 400000 LAND 500000 EQUIPMENT 400000 A/D EQUIPMENT 10000 TOTAL ASSETS 1790000 ACCOUNTS PAYABLE 300,000 COMMON STOCK 10 PAR 400000 ADDITIONAL PAID IN CAPITAL 300000 RETAINED EARNINGS 790,000 On January 2nd 2016 GAGA purchased all of the outstanding shares of BIEBER BY ISSUING 1000 BIEBER’S LAND WAS WORTH $55000 AND ITS EQUIPMENT WITH A 5 YEAR LIFE WAS WORTH $10 IN ADDITION, BIEBER HAD A CUSTOMER LIST WITH A 10 YEAR LIFE WORTH $12000 ANY EXCESS IGAGA HAS DECIDED THAT BIEBER WILL CONTINUE TO EXIST. REQUIREDA) MAKE THE JOURNAL ENTRY GAGA MAKES WHEN IT ISSUES ITS SHARES TO ACQUIRE BIEBER B) MAKE THE JOURNAL ENTRY BIEBER MAKES WHEN ITS OWNERS EXCHANGE THEIR BIEBER SHA C) PREPARE A CONSOLIDATED BALANCE SHEET ON JANUARY 3RDD) MAKE ANY NECESSARY WORKSHEET ENTRIES NEEDED TO PREPARE THE BALANCE SHEET heets on 1/1/2016BIEBER1500030005000025000500088000 40,00030000100008,000 hares of BIEBER BY ISSUING 1000 SHARES OF ITS STOCK WHICH HAS A $75 MARKET PRICE PER SHARE At th H A 5 YEAR LIFE WAS WORTH $10,000 IFE WORTH $12000 ANY EXCESS IS ATTRIBUTABLE TO GOODWILL TS SHARES TO ACQUIRE BIEBER RS EXCHANGE THEIR BIEBER SHARES FOR GAGA SHARES EPARE THE BALANCE SHEET 5 MARKET PRICE PER SHARE At this time The GAGA and BIEBER COMPANIES had the following balance sheets on 1/1/2016GAGA BIEBER CASH 500000 15000 ACCOUNTS RECEIVABLE 400000 3000 LAND 500000 50000 EQUIPMENT 400000 25000 10000 5000 TOTAL ASSETS 1790000 88000 ACCOUNTS PAYABLE 300,000 40,000 COMMON STOCK 10 PAR 400000 30000 ADDITIONAL PAID IN CAPITA 300000 10000 RETAINED EARNINGS 790,000 8,000 A/D EQUIPMENT On January 2nd 2016 GAGA purchased 70% of the outstanding shares of BIEBER BY ISSUING 100 BIEBER’S LAND WAS WORTH $55000 AND ITS EQUIPMENT WITH A 5 YEAR LIFE WAS WORTH $10 IN ADDITION, BIEBER HAD A CUSTOMER LIST WITH A 10 YEAR LIFE WORTH $12000 ANY EXCESS IGAGA HAS DECIDED THAT BIEBER WILL CONTINUE TO EXIST. REQUIREDA) MAKE THE JOURNAL ENTRY GAGA MAKES WHEN IT ISSUES ITS SHARES TO ACQUIRE BIEBER B) MAKE THE JOURNAL ENTRY BIEBER MAKES WHEN ITS OWNERS EXCHANGE THEIR BIEBER SHA C) PREPARE A CONSOLIDATED BALANCE SHEET ON JANUARY 3RDD) MAKE ANY NECESSARY WORKSHEET ENTRIES NEEDED TO PREPARE THE BALANCE SHEET EBER BY ISSUING 1000 SHARES OF ITS STOCK WHICH HAS A $75 MARKET PRICE PER SHARE At this time IFE WAS WORTH $10,000 $12000 ANY EXCESS IS ATTRIBUTABLE TO GOODWILL O ACQUIRE BIEBER GE THEIR BIEBER SHARES FOR GAGA SHARES ALANCE SHEET HARE At this time NOTE: THIS IS A CONTINUATION OF PROBLEM 3ON 12/31/2016 BIEBER AND GAGA HAVE THE FOLLOWING FINANCIAL STATEMENTSINCOME STATEMENTFOR 2016BIEBER GAGA SALES 9000 800000 COST OF GOODS SOLD 4000 400000 GROSS PROFIT 5000 400000 DEPRECIATION EXPENSE 4000 78000 INVESTMENT INCOMEINCOME 0 A 1000 B BALANCE SHEETBIEBERCASH GAGA19000 822700 3000 400000 LAND 50000 500000 EQUIPMENT 25000 400000 9000 88000 ACCOUNTS RECEIVABLE A/D EQUIPMENTINVESTMENT IN BIEBERTOTAL ASSETS 0 C 88000 D ACCOUNTS PAYABLE 40000 300000 COMMON STOCK 10 PAR 30000 410000 ADDITIONAL PAID IN CAPITA 10000 365000 RETAINED EARNINGS 8000 E REQUIRED: YOU MAY CHOOSE ANY METHOD YOU LIKE (INITIAL VALUE, PARTIAL EQUITY OR FULLA) WHICH METHOD DID YOU CHOOSE? B) DETERMINE THE VALUES OF A THROUGH E C) MAKE THE NECESSARY JOURNAL ENTRIES GAGA MAKES DURING 2016 (AFTER JANU D) PREPARE A CONSOLIDATED INCOME STATEMENT FOR 2016 E) PREPARE A CONSOLIDATED BALANCE SHEET ON 12/31/16. TEMENTS RTIAL EQUITY OR FULL EQUITY) RING 2016 (AFTER JANUARY 3RD) REGARDING ITS INVESTMENT IN BIEBER ON 1/1/2009 THE OBAMA COMPANY PURCHASED ALL OF THE STOCK IN THE BIDEN COMPANY AT OBAMA ACCOUNTS FOR ITS INVESTMENT IN BIDEN USING THE INITIAL VALUE METHOD AND BID ON 1/1/2011 THE OBAMA COMPANY PURCHASED A TRUCK FOR $90,000 THIS TRUCK IS EXPECTEAND HAVE A $6000 SALVAGE VALUE. OBAMA USES STRAIGHT LINE DEPRECIATION ON 1/1/2014 THE OBAMA COMPANY SOLD THE TRUCK TO THE BIDEN COMPANY FOR $78,000. B TRUCK WILL LAST 9 YEARS AND HAVE A $6000 SALVAGE VALUE. BIDEN ALSO USES STRAIGHT LINBIDEN GAVE OBAMA A 1 YEAR 10% NOTE WITH PRINCIPLE AND INTEREST DUE 1/1/20151/1/2015 BIDEN PAID OFF THE NOTE AND INTERESTON 1/1/2018 BIDEN SOLD THE TRUCK TO THE ELMO COMPANY FOR $55000.UNCONSOLIDATED INCOME FOR OBAMA AND BIDEN WERE AS FOLLOWS:OBAMA BIDEN 2014 350000 43000 2015 365000 45000 2016 379000 48000 2017 399000 51000 2018 411000 55000 REQUIRED: NOTE: THE ONLY TRANSACTION BIDEN AND OBAMA HAD WITH EACH OTH A) DETERMINE OBAMA’S ANNUAL DEPRECIATION EXPENSE FOR THIS TRUCK B) MAKE THE JOURNAL ENTRY OBAMA MAKES WHEN HE SELLS THE TRUCK TO C) MAKE THE JOURNAL ENTRY BIDEN MAKES WHEN HE BUYS THE TRUCK FRO D) DETERMINE BIDEN’S ANNUAL DEPRECIATION EXPENSE FOR THIS TRUCK E) MAKE THE NECESSARY WORKSHEET ENTRIES NEEDED 12/31/14 CONNECTE F) DETERMINE 2014 CONSOLIDATED INCOME G) MAKE THE NECESSARY WORKSHEET ENTRIES NEEDED 12/31/15 CONNECTE H) DETERMINE 2015 CONSOLIDATED INCOME I) DETERMINE 2016 CONSOLIDATED INCOME J) DETERMINE 2017 CONSOLIDATED INCOME K MAKE THE JOURNAL ENTRY BIDEN MAKES WHEN HE SELLS THE TRUCK IN 2 L MAKE THE NECESSARY WORKSHEET ENTRIES NEEDED 12/31/18 CONNECTE M DETERMINE 2018 CONSOLIDATED INCOME BIDEN COMPANY AT BOOK VALUE E METHOD AND BIDEN DOESN’T PAY DIVIDENDS S TRUCK IS EXPECTED TO LAST 12 YEARS ANY FOR $78,000. BIDEN BELIEVES THEUSES STRAIGHT LINE DEPRECIATION UE 1/1/2015 HAD WITH EACH OTHER DEALT WITH THE TRUCK E FOR THIS TRUCK SELLS THE TRUCK TO BIDEN UYS THE TRUCK FROM OBAMA FOR THIS TRUCK 2/31/14 CONNECTED WITH THIS TRUCK 2/31/15 CONNECTED WITH THIS TRUCK ELLS THE TRUCK IN 2018 2/31/18 CONNECTED WITH THIS TRUCK On 1/1/1999 Batman Co. purchased all of the outstanding shares of Superman Comp Superman Company doesn’t pay dividends and Batman Company uses the initial valu On 1/1/2013 Superman Company issued $1,000,000 8% 20 year bonds for $940,000of the discount. These bonds pay interest annually on January 1st. On 1/1/2015 Batman purchased 1/2/ of the Superman Company bonds in the markeuses straight line amortization for its investment in bonds AGAIN, BATMAN AND SUPERMAN HAD NO TRANSACTIONS WITH EACH O REQUIRED A) MAKE THE JOURNAL ENTRY SUPERMAN MADE WHEN IT SOLD THE BO B). MAKE THE ENTRY SUPERMAN MAKES ON DECEMBER 31 FOR ACCRUIC) MAKE THE ENTRY BATMAN MAKES WHEN IT BUYS THE BONDS D) MAKE THE ENTRY BATMAN MAKES ON DECEMBER 31 TO ACCURE INTE E) MAKE THE WORKSHEET ENTRIES NEEDED 12/31/15 CONNECTED WITH F) MAKE THE WORKSHEET ENTRIES NEEDED 12/31/16 CONNECTED WITH G) IN 2015 BATMAN REPORTED UNCONSOLIDATED INCOME OF $333,000$90,000 WHAT WAS CONSOLIDATED INCOME IN 2015? H) IN 2016 BATMAN REPORTED UNCONSOLIDATED INCOME OF $333,000$90,000 WHAT WAS CONSOLIDATED INCOME IN 2016? I) ON 12/31/14 BATMAN HAD UNCONSOLIDATED RETAINED EARNINGS O EARNINGS OF $7,500,000. WHAT WAS BATMAN’S UNCONSOLIDATED AND I1) 12/31/15I2) 12/31/16 s of Superman Company at book value y uses the initial value method for its investment in Superman bonds for $940,000. Superman uses straight line amortization y bonds in the market place for $482,000. Batman also TIONS WITH EACH OTHER EXCEPT FOR THE BOND TRANSACTIONS HEN IT SOLD THE BONDS BER 31 FOR ACCRUING INTERESTTHE BONDS31 TO ACCURE INTEREST 5 CONNECTED WITH THE BONDS 6 CONNECTED WITH THE BONDS NCOME OF $333,000 AND SUPERMAN REPORTED INCOME OF NCOME OF $333,000 AND SUPERMAN REPORTED INCOME OF TAINED EARNINGS OF $5,400,000 AND CONSOLIDATED RETAINED CONSOLIDATED AND CONSOLIDATED RETAINED EARNINGS ON ON JANUARY 1, 1999 PEANUT PURCHASED 800 OF THE 1000 SHARES OF BUTTER STOPEANUT AND BUTTER HAVE NO INTERCOMPANY DEALINGS AND BUTTER DOES NOTINFORMATION FOR 2016 ARE AS FOLLOWS: INCOME STATEMENTSPEANUT BUTTER REVENUE 800,000 150,000 COST OF GOODS SOLD 300,000 80,000 INTEREST EXP 0 4000 INVESTMENT INCOME 0 0 INCOME TAX 30% 150000 19800 INCOME 350000 46,200 PARTIAL BALANCE SHEETCONVERTIBLE BONDS COMMON STOCK $1 PAR 0 40,000 90,000 1000 REQUIRED: A) THE 10% CONVERTIBLE BONDS CAN BE CONVERTED INTO 50 TOTALDETERMINE THE EPS OF PEANUT B) THE 10% CONVERTIBLE BONDS CAN BE CONVERTED INTO 300 TOTADETERMINE THE EPS OF PEANUT HARES OF BUTTER STOCK AT BOOK VALUE ND BUTTER DOES NOT PAY DIVIDENDS VERTED INTO 50 TOTAL SHARES OF BUTTER STOCK MAKING THEM ANTI-DILUTIVE VERTED INTO 300 TOTAL SHARES OF BUTTER MAKING THEM DILUTIVE DILUTIVE On 1/1/2000 Jack purchased 100% of the outstanding stock of Jill at book value Jack accounts for its investment in Jill using the initial value method and Jill does not pa On 10/1/16 Jack sold merchandise to Jill for $50,000 on credit The merchandise had On 12/31/16 Jill had not sold any of the inventory acquired from Jack and had not paid In 2017 Jill sold 80% of the merchandise acquired from Jack for $48000 and paid off Jac In 2018 Jill sold the other 20% of the merchandise from Jack for $19000 AGAIN, JACK AND JILL HAVE NO TRANSACTIONS WITH EACH OTHER EXCE REQUIRED: A) USING PERPETUAL INVENTORY RECORD JACK’S JOURNAL ENTRY FOR TDebit AR 50000 Credit Sales 50000 B) USING PERPETUAL INVENTORY RECORD JILL’S PURCHASE OF INVENTODebit Inventory 50000 Credit AP 50000 C) MAKE ANY WORKSHEET ENTRIES NEEDED 12/31/16 DUE TO THIS INVEDebit AP 50000 Credit AR 50000 D) UNCONSOLILDATED, JACK REPORTED INCOME OF $500000 AND JILL RWHAT WAS CONSOLIDATED INCOME IN 2016?580000 E) MAKE ANY WORKSHEET ENTRIES NEEDED 12/31/17 DUE TO THE INTRADebit AR 50000 Credit AP 50000 F) UNCONSOLIDATED JACK REPORTED INCOME OF 650,000 AND JILL REPWHAT WAS CONSOLIDATED INCOME IN 2017?650000+90000+24000 764000 G) MAKE ANY WORKSHEET ENTRIES NEEDED 12/31/2018 DUE TO THE INDebit RE 4000 Creit COGS 4000 H) UNCONSOLIDATED JACK REPORTED INCOME OF $777000 AND JILL REPWHAT WAS CONSOLIDATED INCOME IN 2018?777000+101000+13000 891000 I) ON JANUARY 1 2016 JACK HAD UNCONSOLIDATED RETAINED EARNING RETAINED EARNINGS OF $3,000,000. WHAT WAS JACK’S UNCONSOLIDAT ON 12/31/16, 12/31/17 AND 12/31/18? NOTE: JACK ALSO DOES NOT PA Consolidated Unconsolidated 2016 3000000 900000 2017 3764000 1550000 2018 4655000 2327000 Jill at book value hod and Jill does not pay dividends t The merchandise had cost Jack $30000 m Jack and had not paid off the accounts payable to Jack $48000 and paid off Jack $19000 WITH EACH OTHER EXCEPT FOR THIS INVENTORY TRANSACTION JOURNAL ENTRY FOR THE SALE TO JILLCOGS 30000 Inventory 30000 PURCHASE OF INVENTORY 31/16 DUE TO THIS INVENTORY TRANSACTIONSales 50000 COGS 30000 Inventory 20000 OF $500000 AND JILL REPORTED INCOME OF $80000 31/17 DUE TO THE INTRA-COMPANY SALE OF INVENTORYRE 16000 RE 24000 COGS 16000 Inventory 24000 F 650,000 AND JILL REPORTED INCOME OF $90000 31/2018 DUE TO THE INTRA-COMPANY SALE OF INVENTORYRE 6000 Inventory 6000 F $777000 AND JILL REPORTED INCOME OF $101,000 ED RETAINED EARNINGS OF $900,000 AND CONSOLIDATEDJACK’S UNCONSOLIDATED AND CONSOLIDATED RETAINED EARNINGS JACK ALSO DOES NOT PAY DIVIDENDS

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