Question

Following are several figures reported for Allister and Barone as of December 31, 2018: Allister Barone...

Following are several figures reported for Allister and Barone as of December 31, 2018:

Allister Barone
Inventory $ 430,000 $ 230,000
Sales 860,000 660,000
Investment income not given
Cost of goods sold 430,000 330,000
Operating expenses 195,000 265,000

Allister acquired 70 percent of Barone in January 2017. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $64,000 that was unrecorded on its accounting records and had a 5-year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2018, Barone sells inventory costing $123,000 to Allister for $166,000. Of this amount, 20 percent remains unsold in Allister's warehouse at year-end.

Determine balances for the following items that would appear on Allister's consolidated financial statements for 2018:

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer :

Inventory 651400
Sales 1354000
Cost of goods sold 602600
Operatin expenses 472800
Net income attributable to non controlling interest -

Explanation :

Customer list amortization = $64000 / 5 Years = 12800 per year

Intra - Entity gross profit ($166000 - $123000) $43000
Inventory remaining at year end 20%
Unrealized intra - entity gross profit 12/31 $8600

Inventory = book value of allister and barone - Unrealized gross profit

= 430000 + 230000 -8600 = $651400

Sales = book value of allister and barone - intra entity transfer

= 860000 + 660000 - 166000 = $1354000

Cost of goods sold = book value of allister and barone + unrealized gross profit - intra entity transfer

= 430000 + 330000 + 8600 - 166000 = $602600

Operating expenses = book values of allister and barone + amortization expenses for the period

= 195000 + 265000 + 12800 = $472800

Kindly Up -vote Thank You !!!

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Following are several figures reported for Allister and Barone as of December 31, 2018: Allister Barone...
Following are several figures reported for Allister and Barone as of December 31, 2018: Allister Barone Inventory $ 410,000 $ 210,000 Sales 820,000 620,000 Investment income not given Cost of goods sold 410,000 310,000 Operating expenses 185,000 255,000 Allister acquired 80 percent of Barone in January 2017. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $60,000 that was unrecorded on its accounting records and had a...
Following are selected accounts for Green Corporation and Vega Company as of December 31, 2023. Several...
Following are selected accounts for Green Corporation and Vega Company as of December 31, 2023. Several of Green's accounts have been omitted.                                                    Green          Vega Revenues                               $ 900,000 $ 500,000 Cost of goods sold                   360,000    200,000 Depreciation expense              140,000      40,000 Other expenses                        100,000        60,000 Equity in Vega’s income             ? Retained earnings, 1/1/2023 1,350,000 1,200,000 Dividends                                 195,000      80,000 Current assets                         300,000 1,380,000 Land                                        450,000    180,000 Building (net)                          750,000       280,000 Equipment (net)...
On December 31, 20X9, Add-On Company acquired 100 percent of Venus Corporation's common stock for $300,000....
On December 31, 20X9, Add-On Company acquired 100 percent of Venus Corporation's common stock for $300,000. Balance sheet information Venus just prior to the acquisition is given here: Cash and Receivables $35,000 Inventory 75,000 Land 100,000 Buildings and Equipment (net) 220,000 Total Assets $430,000 Accounts Payable $65,000 Bonds Payable 150,000 Common Stock 100,000 Retained Earnings 115,000 Total Liabilities and Stockholders’ Equity $430,000 At the date of the business combination, Venus's net assets and liabilities approximated fair value except for inventory,...
Following are selected accounts for Mergaronite Company and Hill, Inc., as of December 31, 2018. Several...
Following are selected accounts for Mergaronite Company and Hill, Inc., as of December 31, 2018. Several of Mergaronite’s accounts have been omitted. Credit balances are indicated by parentheses. Dividends were declared and paid in the same period. Mergaronite Hill Revenues $ (610,000 ) $ (250,000 ) Cost of goods sold 262,000 96,000 Depreciation expense 104,000 40,000 Investment income NA NA Retained earnings, 1/1/18 (904,000 ) (590,000 ) Dividends declared 130,000 36,000 Current assets 204,000 690,000 Land 286,000 82,000 Buildings (net)...
Please explain the answers. On December 31, 20X8, Polaris Corporation acquired 100 percent ownership of Star...
Please explain the answers. On December 31, 20X8, Polaris Corporation acquired 100 percent ownership of Star Corporation. On that date, Star reported assets and liabilities with book values of $300,000 and $100,000, respectively, common stock outstanding of $50,000, and retained earnings of $150,000. The book values and fair values of Star's assets and liabilities were identical except for land which had increased in value by $10,000 and inventories which had decreased by $5,000. Based on the preceding information, what amount...
Following are the individual financial statements for Gibson and Davis for the year ending December 31,...
Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2018: Gibson Davis Sales $ (821,000 ) $ (422,000 ) Cost of goods sold 382,000 211,000 Operating expenses 262,000 66,000 Dividend income (24,000 ) 0 Net income $ (201,000 ) $ (145,000 ) Retained earnings, 1/1/18 $ (774,000 ) $ (485,000 ) Net income (201,000 ) (145,000 ) Dividends declared 50,000 40,000 Retained earnings, 12/31/18 $ (925,000 ) $ (590,000 ) Cash and receivables...
The individual financial statements for Gibson Company and Keller Company for the year ending December 31,...
The individual financial statements for Gibson Company and Keller Company for the year ending December 31, 2018, follow. Gibson acquired a 60 percent interest in Keller on January 1, 2017, in exchange for various considerations totaling $1,020,000. At the acquisition date, the fair value of the noncontrolling interest was $680,000 and Keller’s book value was $1,360,000. Keller had developed internally a customer list that was not recorded on its books but had an acquisition-date fair value of $340,000. This intangible...
Problem 2 (40%) Trial balance data for Pepper and Salt as of December 31, 2018 follows....
Problem 2 (40%) Trial balance data for Pepper and Salt as of December 31, 2018 follows. Pepper company acquired 100% of the shares of Salt at $(500,000) when the book value of Salt’s net assets was equal to $350,000. At that date the fair value of Building and equipment was $20,000 more than the book value and the value of Land $50,000 above book value. Building and equipment are depreciated on a 10-year basis. At December 31, 2018, Pepper Company...
On January 1, 2016, Monica Company acquired 70 percent of Young Company’s outstanding common stock for...
On January 1, 2016, Monica Company acquired 70 percent of Young Company’s outstanding common stock for $665,000. The fair value of the noncontrolling interest at the acquisition date was $285,000. Young reported stockholders’ equity accounts on that date as follows: Common stock—$10 par value $ 300,000 Additional paid-in capital 90,000 Retained earnings 410,000 In establishing the acquisition value, Monica appraised Young's assets and ascertained that the accounting records undervalued a building (with a five-year remaining life) by $50,000. Any remaining...
Early in its fiscal year ending December 31, 2018, San Antonio Outfitters finalized plans to expand...
Early in its fiscal year ending December 31, 2018, San Antonio Outfitters finalized plans to expand operations. The first stage was completed on January 1 with the purchase of a tract of land on the outskirts of the city. The land and existing building were purchased for $880,000. San Antonio paid $240,000 and signed a noninterest bearing note requiring the company to pay the remaining $640,000 on January 1, 2020. An interest rate of 10% properly reflects the time value...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT