Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
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Chapter 4, Problem 39P
To determine
Prepare a worksheet to consolidate the financial statements of these two companies.
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Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2018, for $802,720 cash. At the acquisition date, Sierra’s total fair value, including the noncontrolling interest, was assessed at $1,003,400 although Sierra’s book value was only $690,000. Also, several individual items on Sierra’s financial records had fair values that differed from their book values as follows:
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Book Value
Fair Value
Land
$ 65,000  
$ 290,000  
Buildings andequipment (10-year remaining life)
287,000  
263,000  
Copyright (20-year remaining life)
122,000  
216,000  
Notes payable (due in 8 years)
(176,000)
(157,600)
For internal reporting purposes, Padre, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2018, for both companies.
Â
Padre
Sierra
Revenues
$(1,394,980)
$  (684,900)
Cost of goods sold
774,000  
432,000  
Depreciation expense
274,000  
11,600…
Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2021, for $802,720 cash. At the acquisition date, Sierra’s total fair value, including the noncontrolling interest, was assessed at $1,003,400 although Sierra’s book value was only $690,000. Also, several individual items on Sierra’s financial records had fair values that differed from their book values as follows:
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Â
Book Value
Â
Fair Value
Land
$
65,000
Â
Â
$
290,000
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Buildings and equipment (10-year remaining life)
Â
287,000
Â
Â
Â
263,000
Â
Copyright (20-year remaining life)
Â
122,000
Â
Â
Â
216,000
Â
Notes payable (due in 8 years)
Â
(176,000
)
Â
Â
(157,600
)
Â
Â
For internal reporting purposes, Padre, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2021, for both companies.
Â
Â
Padre
Â
Sierra
Revenues
$
(1,394,980
)
Â
$
(684,900
)
Cost of goods sold
Â
774,000
Â
Â
Â
432,000…
Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2021, for
$802,720 cash. At the acquisition date, Sierra's total fair value, including the noncontrolling interest, was assessed
at $1,003,400 although Sierra's book value was only $690,000. Also, several individual items on Sierra's financial
records had fair values that differed from their book values as follows:
Book Value
Fair Value
$ 65,000
287,000
$ 290,000
263,000
216,000
(157,600)
Land
Buildings and equipment (10-year remaining life)
Copyright (20-year remaining life)
Notes payable (due in 8 years)
122,000
(176,000)
For internal reporting purposes, Padre, Inc., employs the equity method to account for this investment. The
following account balances are for the year ending December 31, 2021, for both companies.
Padre
Sierra
$(1,394,980)
774,000
274,000
(684,900)
432,000
11,600
6,100
9,200
Revenues
Cost of goods sold
Depreciation expense
Amortization expense
Interest expense
52,100…
Chapter 4 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
Ch. 4 - Prob. 1QCh. 4 - Atwater Company acquires 80 percent of the...Ch. 4 - What is a control premium and how does it affect...Ch. 4 - Prob. 4QCh. 4 - How is the noncontrolling interest in a subsidiary...Ch. 4 - Prob. 6QCh. 4 - Prob. 7QCh. 4 - Prob. 8QCh. 4 - Prob. 9QCh. 4 - Prob. 10Q
Ch. 4 - Prob. 1PCh. 4 - Prob. 2PCh. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Prob. 5PCh. 4 - Prob. 6PCh. 4 - Prob. 7PCh. 4 - Assuming that Pride, in its internal records,...Ch. 4 - Prob. 9PCh. 4 - Prob. 10PCh. 4 - Prob. 11PCh. 4 - Prob. 12PCh. 4 - Prob. 13PCh. 4 - Prob. 14PCh. 4 - Prob. 15PCh. 4 - Prob. 16PCh. 4 - Prob. 17PCh. 4 - Prob. 18PCh. 4 - Current liabilities: a. 50,000 b. 46,000 c. 40,000...Ch. 4 - Prob. 20PCh. 4 - Stockholders equity: a. 80,000 b. 90,000 c. 95,000...Ch. 4 - Prob. 22PCh. 4 - Prob. 23PCh. 4 - Prob. 24PCh. 4 - Prob. 25PCh. 4 - Prob. 26PCh. 4 - Prob. 27PCh. 4 - Prob. 28PCh. 4 - Prob. 29PCh. 4 - Prob. 30PCh. 4 - Prob. 31PCh. 4 - Prob. 32PCh. 4 - Prob. 33PCh. 4 - Prob. 34PCh. 4 - Prob. 35PCh. 4 - Prob. 36PCh. 4 - Prob. 37PCh. 4 - Prob. 38PCh. 4 - Prob. 39PCh. 4 - Prob. 40PCh. 4 - Prob. 41PCh. 4 - Prob. 42PCh. 4 - Prob. 43PCh. 4 - Prob. 44PCh. 4 - Prob. 1DYSCh. 4 - Prob. 2DYSCh. 4 - Costco Wholesale Corporation owns and operates...
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