Solution manual fundamentals of advanced accounting 9e by fischer taylor special appendix

To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com SPECIAL APPENDIX CHAPTER EXERCISES EXERCISE SA1-1 Value analysis: Price paid Total fair value of net assets $400,000 528,000 Goodwill Gain n/a 128,000 Journal entry: Currents Assets Land (fair value) Buildings (net) (fair value) Equipment (net) (fair value) Patents (fair value) Cash Liabilities (fair value) Gain on Purchase 120,000 80,000 250,000 150,000 20,000 Dr = Cr check amounts 620,000 Acquisition Expense* Cash 23,000 *$18,000 direct + $5,000 indirect 317 400,000 92,000 128,000 620,000 23,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com PROBLEMS PROBLEM SA1-1 Purchase price: Cash Number of shares exchanged Par value of a share of stock Market value of a share of stock Part Part $385,000 20,000 $10 $25 Market value of stock exchanged $500,000 Total purchase price $500,000 $385,000 $500,000 420,000 80,000 n/a $385,000 420,000 n/a 35,000 Value analysis: Price paid Fair value of net assets Goodwill Gain Kent Corporation journal entries: (1) Accounts Receivable Inventory Land Building Goodwill Accounts Payable Common Stock Paid-In Capital in Excess of Par 50,000 250,000 40,000 120,000 80,000 (2) Accounts Receivable Inventory Land Building Accounts Payable Gain on Purchase Cash 50,000 250,000 40,000 120,000 318 40,000 200,000 300,000 40,000 35,000 385,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com CHAPTER EXERCISES EXERCISE SA2-1 (1) Value Analysis Schedule Company fair value Fair value of net assets excluding goodwill Goodwill Gain Parent Price 720,000 656,000 64,000 n/a NCI Company Value 180,000 900,000 164,000 820,000 16,000 80,000 — Determination and Distribution of Excess Schedule Fair value of subsidiary: Company Value 900,000 Less book value interest acquired: Common stock, $5 par Paid-in excess of par Retained earnings Total equity Interest acquired Book value Excess of cost over book value (debit) Parent NCI Worksheet Price Value Distribution 720,000 180,000 100,000 150,000 250,000 500,000 400,000 Adjustment of identifiable accounts: Inventory ($300,000 fair – $200,000 book value) Land ($200,000 fair – $100,000 book value) Building ($600,000 fair – $450,000 book value) Equipment ($200,000 fair – $230,000 book value) Goodwill Total 319 80.00% 20.00% 400,000 100,000 320,000 80,000 100,000 debit D1 100,000 debit D2 150,000 debit D3 (30,000) 80,000 400,000 credit D4 debit D5 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise SA2-1, Concluded (2) Elimination entries: Common Stock ($5 par, 80%) Paid-In Capital in Excess of Par (80%) Retained Earnings (80%) Investment in Cooker Company 80,000 120,000 200,000 Inventory Land Building Goodwill Equipment Investment in Cooker Company (excess remaining) Noncontrolling Interest (RE) (to adjust to fair value) 100,000 100,000 150,000 80,000 400,000 30,000 320,000 80,000 EXERCISE SA2-2 (1) Value Analysis Schedule Company fair value Fair value of net assets excluding goodwill Goodwill Gain Parent Price 656,000 536,000 120,000 n/a NCI Company Value 164,000 820,000 134,000 670,000 30,000 150,000 — Determination and Distribution of Excess Schedule Fair value of subsidiary: Company Value 820,000 Less book value interest acquired: Common stock, $5 par Paid-in excess of par Retained earnings Total equity Interest acquired Book value Excess of cost over book value (debit) Parent NCI Worksheet Price Value Distribution 656,000 164,000 50,000 130,000 370,000 550,000 270,000 Adjustment of identifiable accounts: Inventory ($400,000 fair – $280,000 book value) Property, plant, and equipment ($500,000 fair – $400,000 book value) Goodwill ($150,000 fair – $100,000 book value) Total 120,000 debit D1 100,000 debit D2 50,000 270,000 320 80.00% 20.00% 440,000 110,000 216,000 54,000 debit D3 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise SA2-2, Continued (2) Elimination entries: Common Stock ($5 par, 80%) Paid-In Capital in Excess of Par (80%) Retained Earnings (80%) Investment in Saturn Company 40,000 104,000 296,000 Inventory Property, Plant, and Equipment Goodwill Investment in Saturn Company (excess remaining) Noncontrolling Interest (RE) (to adjust to fair value) 120,000 100,000 50,000 440,000 216,000 54,000 (3) Value analysis: Value Analysis Schedule Company fair value Parent Price 512,000 Fair value of net assets excluding goodwill Goodwill Gain 536,000 NCI Company Value 128,000 646,000 134,000 134,000 670,000 24,000 24,000 Determination and Distribution of Excess Schedule Fair value of subsidiary: Company Value 646,000 Less book value interest acquired: Common stock, $5 par Paid-in excess of par Retained earnings Total equity Interest acquired Book value Excess of cost over book value (debit) Parent NCI Worksheet Price Value Distribution 512,000 134,000 50,000 130,000 370,000 550,000 96,000 Adjustment of identifiable accounts: Inventory ($400,000 fair – $280,000 book value) Property, plant, and equipment ($500,000 fair – $400,000 book value) Goodwill ($0 fair – $100,000 book value) Gain Total 120,000 debit D1 100,000 debit D2 (100,000) (24,000) 96,000 321 80.00% 20.00% 440,000 110,000 72,000 24,000 credit D3 credit D4 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise SA2-2, Concluded Elimination entries: Common Stock ($5 par, 80%) Paid-In Capital in Excess of Par (80%) Retained Earnings (80%) Investment in Saturn Company 40,000 104,000 296,000 Inventory Property, Plant, and Equipment Goodwill Gain Investment in Saturn Company (excess remaining) Noncontrolling Interest (RE) (to adjust to fair value) 120,000 100,000 322 440,000 100,000 24,000 72,000 24,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com PROBLEMS PROBLEM SA2-1 (1) Investment in Express Corporation Cash (2) 320,000 320,000 Value Analysis Schedule Company fair value Parent Price 320,000 Fair value of net assets excluding goodwill Goodwill Extraordinary gain 341,600 — 21,600 NCI Company Value 80,000 405,400 85,400 85,400 427,000 — — 21,600 Determination and Distribution of Excess Schedule Fair value of subsidiary: Company Value 405,400 Less book value interest acquired: Common stock, $10 par Paid-in excess of par Retained earnings Total equity Interest acquired Book value Excess of cost over book value (debit) Parent NCI Worksheet Price Value Distribution 320,000 85,400 50,000 250,000 70,000 370,000 35,400 Adjustment of identifiable accounts: Inventory ($100,000 fair – $80,000 book value) Land ($50,000 fair – $40,000 book value) Buildings ($200,000 fair – $180,000 book value) Equipment ($162,000 fair value – $160,000 book value) Discount on bonds payable ($95,000 fair – $100,000 book value) Gain Total 80.00% 20.00% 296,000 74,000 24,000 11,400 20,000 debit D1 10,000 debit D2 20,000 debit D3 2,000 debit D4 5,000 (21,600) 35,400 323 0 debit D5 credit D6 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA2-1, Concluded (3) Elimination entries: Common Stock Paid-In Capital in Excess of Par Retained Earnings Investment in Express Corporation 40,000 200,000 56,000 Inventory Land Buildings Equipment Discount on Bonds Payable Retained Earnings—Controlling (gain) Retained Earnings—Express (adjust NCI) Investment in Express Corporation 20,000 10,000 20,000 2,000 5,000 324 296,000 21,600 11,400 24,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com PROBLEM SA2-2 (1) Value Analysis Parent Price Price paid Fair value of net assets excluding goodwill Goodwill Gain NCI 950,000 237,500 680,000 270,000 n/a 170,000 67,500 Determination and Distribution of Excess Schedule Company Parent Value Price Fair value of subsidiary: 1,187,500 950,000 Less book value interest acquired: Common stock 10,000 Paid-in excess of par 190,000 Retained earnings 140,000 Total equity 340,000 Interest acquired 80.00% Book value 272,000 Excess of cost over book value 847,500 678,000 Adjustments to accounts: Inventory Land Buildings Equipment Patent Computer software Premium on bonds payable Goodwill ($337,000 – $60,000) Extraordinary gain Total 325 (20,000) 100,000 200,000 110,000 140,000 50,000 (10,000) 277,500 — 847,500 Company 1,187,500 850,000 337,500 — NCI 237,500 20.00% 68,000 169,500 Worksheet Distribution credit D1 debit D2 debit D3 debit D4 debit D5 debit D6 credit D7 debit D8 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA2-2, Continued Parton Company and Subsidiary Soma Corporation Worksheet for Consolidated Financial Statements For Year Ended December 31, 20X1 (2) Balance Sheet Parton Soma Cash Accounts Receivable 350,000 Inventory 510,000 Investment in Soma Land 1,000,000 Buildings 3,300,000 Accumulated Depreciation (600,000) Equipment 850,000 Accumulated Depreciation (280,000) Patent 150,000 Computer Software 50,000 Goodwill 337,500 Current Liabilities (240,000) Bonds Payable (500,000) Premium on Bonds Payable Common Stock—Soma Paid-In Excess—Soma Retained Earnings—Soma Eliminations Dr Cr 170,000 300,000 50,000 410,000 120,000 950,000 800,000 100,000 2,800,000 300,000 (500,000) (100,000) 600,000 140,000 (230,000) (50,000) 10,000 (D6) 60,000 NCI (D1) (D4) 110,000 (D5) 140,000 50,000 (D8) 277,500 (150,000) (90,000) (300,000) (200,000) (10,000) (190,000) (140,000) (EL) (EL) (EL) 326 170,000 20,000 (EL) 272,000 (D) 678,000 (D2) 100,000 (D3) 200,000 Consolidated Balance Sheet (D7) 10,000 (10,000) 8,000 (2,000) 152,000 (38,000) 112,000 (NCI) 169,500 (197,500) To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Common Stock—Parton Paid-In Excess—Parton (3,655,000) Retained Earnings—Parton (1,100,000) Totals (95,000) (3,655,000) (1,100,000) 0 1,149,500 1,149,500 NCI (237,500) (237,500) Totals 327 (95,000) To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA2-2, Concluded Eliminations and Adjustments: (EL) Eliminate parent ownership interest (D) Distribute excess (NCI) Adjust NCI to fair value Distribute adjustments: (D1) (D2) (D3) (D4) (D5) (D7) (D8) Inventory Land Buildings Equipment Patent Computer software Goodwill 328 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com CHAPTER PROBLEMS PROBLEM SA3-1 (1) Parent Price Value Analysis Company fair value Fair value of net assets excluding GW Goodwill Gain 308,000 268,000 40,000 n/a NCI Value 77,000 67,000 10,000 Determination and Distribution of Excess Schedule Company Parent Value Price Fair value of subsidiary: 385,000 308,000 Less book value interest acquired: Common stock 50,000 Paid-in excess of par 100,000 Retained earnings 150,000 Total equity 300,000 Interest acquired 80.00% Book value of interest 240,000 Excess of cost over book value (debit) 85,000 68,000 Allocated to: Inventory Buildings Goodwill Total adjustments 329 Company Value 385,000 335,000 50,000 — NCI Value 77,000 20.00% 60,000 17,000 Amortization 10,000 debit D1 25,000 10 debit D2 50,000 debit D3 85,000 2,500 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA3-1, Continued Amortization Schedules Year of Consolidation Account Adjustments Inventory Subject to amortization: Buildings and equipment 5,000 A2 Total amortizations 5,000 Life — Annual Current Amount Year $ 10,000 — 10 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ $ Prior Years — Total — Key D1 Income Distribution Schedules Subsidiary Company Amortizations $2,500 Internally generated net income $90,000 Total NCI share Controlling share $87,500 17,500 70,000 Parent Company Internally generated net income Controlling share of subsidiary $100,000 70,000 Total $170,000 330 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA3-1, Continued (2) Worksheet Year of Consolidation Trial Balance Peres Soll Inventory 150,000 Other Current Assets 328,000 Investment in Soll Land 100,000 Buildings and Equipment 695,000 Accumulated Depreciation (165,000) Goodwill 50,000 Other Intangible Assets 20,000 Current Liabilities (160,000) Bonds Payable (100,000) Other Long-Term Liabilities (200,000) Common Stock—Soll Eliminations Dr Cr Consolidated Net Income NCI Controlling Retained Earnings 100,000 50,000 148,000 180,000 24,000 (EL) (D) (CY1) 72,000 272,000 68,000 5,000 (40,000) (100,000) 388,000 (CY2) 50,000 50,000 350,000 320,000 (100,000) (60,000) (D3) 20,000 (120,000) (200,000) (D2) 25,000 (A2) 50,000 Consolidated Balance Sheet (50,000) (EL) 40,000 (10,000) Paid-In Excess—Soll (100,000) (EL) 80,000 (20,000) Retained Earnings—Soll (190,000) (EL) 152,000 (52,500) (NCI) 17,000 (D1) 2,000 (A2) 500 331 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA3-1, Concluded Worksheet Year of Consolidation (Concluded) Trial Balance Peres Soll Common Stock—Peres (200,000) Paid-In Excess—Peres (100,000) Retained Earnings—Peres Net Sales Eliminations NCI Controlling Retained Earnings Consolidated Balance Sheet Dr Cr Consolidated Net Income (200,000) (100,000) (970,000) (204,000) 560,000 (A2) 2,500 222,500 (214,000) (D1) 8,000 (A2) 2,000 (520,000) (450,000) Cost of Goods Sold 300,000 260,000 Operating Expenses 120,000 100,000 Subsidiary (Dividend) Income (72,000) (CY1) 72,000 Dividends Declared—Soll 30,000 (CY2) 24,000 6,000 Dividends Declared—Peres 50,000 Totals 0 458,000 458,000 Consolidated Net Income (187,500) NCI Share 17,500 (17,500) Controlling Share 170,000 (170,000) NCI (94,000) (94,000) Controlling Retained Earnings (324,000) Totals Eliminations and Adjustments: (CY1) Current-year subsidiary income (CY2) Current-year dividend (EL) Eliminate controlling interest in Sub equity (D) Distribute excess (D1) Inventory (retained earnings) 332 50,000 (324,000) To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com (D2) (D3) (A2) Buildings and equipment Goodwill Amortize excess 333 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com PROBLEM SA3-2 (1) Parent Price Value Analysis Company fair value 300,000 Fair value of net assets excluding goodwill Goodwill Gain 347,200 — 47,200 NCI Value 75,000 86,800 86,800 — Determination and Distribution of Excess Schedule Company Parent Value Price Price paid for investment: 386,800 300,000 Less book value interest acquired: Common stock 10,000 Paid-in excess of par 90,000 Retained earnings 112,000 Total equity 212,000 Interest acquired 80.00% Book value of interest 169,600 Excess of cost over book value (debit) 174,800 130,400 Allocated to: Accounts receivable Inventory Accounts payable Bonds payable Land Buildings Equipment Goodwill Gain Total adjustments 334 Company Value 386,800 434,000 — 47,200 NCI Value 86,800 20.00% 42,400 44,400 Amortization — (2,000) — 4,000 90,000 — 100,000 20 30,000 — (47,200) 174,800 credit D1 debit D3 debit D2 debit D4 debit D5 credit D7 800 5,000 6,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA3-2, Continued Amortization Schedules Year of Consolidation Account adjustments Inventory (2,000) D1 Subject to amortization: Bonds payable Buildings Equipment 18,000 A5 Total amortizations Life Annual Current Amount Year $ (2,000) — 20 800 $ 800 5,000 5,000 6,000 $ 11,800 $11,800 Prior Years Total $ (2,000) $ Key 1,600 2,400 A3 10,000 15,000 A4 6,000 12,000 $23,600 $35,400 Income Distribution Schedules Subsidiary Company Amortizations $11,800 Internally generated net income $35,000 Total NCI share Controlling share $23,200 4,640 18,560 Parent Company Internally generated net income Controlling share of subsidiary $165,000 18,560 Total $183,560 335 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA3-2, Continued Worksheet Year of Consolidation Trial Balance Pcraft Sailair Cash 342,000 Accounts Receivable 145,000 Inventory 206,000 Land 250,000 Investment in Sailair Buildings 1,200,000 Accumulated Depreciation (315,000) Equipment 280,000 Accumulated Depreciation (180,000) Goodwill Current Liabilities (162,000) Bonds Payable (100,000) Discount (Premium) Eliminations Dr Cr Consolidated Net Income NCI Controlling Retained Earnings 282,000 60,000 90,000 55,000 120,000 86,000 100,000 60,000 (D2) 90,000 376,000 (CY1) 28,000 (CY2) 8,000 (EL) 225,600 (D) 130,400 800,000 300,000 (D4) 100,000 15,000 18,000 (80,000) 150,000 100,000 (90,000) (72,000) (60,000) (102,000) (2,000) (18,000) 1,600 (76,480) Common Stock—Sailair Paid-In Excess—Sailair Retained Earnings—Sailair (A4) (220,000) (100,000) Consolidated Balance Sheet (D5) 30,000 (A5) (D3) 4,000 (A3) 2,400 (10,000) (EL) 8,000 (90,000) (EL) 72,000 (182,000) (EL) 145,600 (D) 44,400 (D1) 400 (A3–A5) 4,720 336 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Common Stock—Pcraft (100,000) Paid-In Excess—Pcraft (900,000) Retained Earnings—Pcraft (100,000) (900,000) (375,000) (D7) 47,200 (D1) 1,600 (A3–A5) 18,880 (404,920) 337 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem SA3-2, Concluded Worksheet Year of Consolidation (Concluded) Trial Balance Pcraft Sailair Eliminations Dr Cr Consolidated Net Income NCI Controlling Retained Earnings Consolidated Balance Sheet Sales (800,000) (350,000) (1,150,000) Cost of Goods Sold 450,000 210,000 660,000 30,000 15,000 (A4) 5,000 50,000 15,000 140,000 14,000 68,000 (A5) 6,000 35,000 208,000 8,000 (28,000) (A3) 800 (CY1) 28,000 8,800 Depreciation Expense— Buildings Depreciation Expense— Equipment Other Expenses Interest Expense Gain on Purchase Subsidiary (Dividend) Income Dividends Declared—Sailair 10,000 (CY2) 8,000 2,000 Dividends Declared—Pcraft 20,000 Totals 0 521,000 521,000 Consolidated Net Income (188,200) NCI Share 4,640 (4,640) Controlling Share 183,560 (183,560) NCI (99,120) (99,120) Controlling Retained Earnings (568,480) Totals Eliminations and Adjustments: (CY1) Current-year subsidiary income (CY2) Current-year dividend (EL) Eliminate controlling interest in Sub equity (D) Distribute excess (A) Amortize excess 338 20,000 (568,480) To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 339 ... ebook, solutions and test bank, visit http://downloadslide.blogspot.com PROBLEMS PROBLEM SA1-1 Purchase price: Cash Number of shares exchanged Par value of a share of stock... exchanged Par value of a share of stock Market value of a share of stock Part Part $385,000 20,000 $10 $25 Market value of stock exchanged $500,000 Total purchase price ... Determination and Distribution of Excess Schedule Fair value of subsidiary: Company Value 900,000 Less book value interest acquired: Common stock, $5 par Paid-in excess of par Retained earnings