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Translate a trial balance and prepare a consolidat...

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Translate a trial balance and prepare a consolidation worksheet with excess of cost over book value traceable to equipment. Due to increasing pressures to expand globally, Pueblo Corporation acquired a 100% interest in Sorenson Company, a foreign company, on January 1, 2016. Pueblo paid 12,000,000 FC, and Sorenson?s equity consisted of the following: Common Stock????????????????..? 3,000,000 FC Paid-in Capital in excess of par????????? 2,000,000 Retained earnings???????????????? 4,200,000 Total???????????????????????? 9,200,000 FC On the date of acquisition equipment with a 10-year life was undervalued by 500,000 FC. Any remaining excess of cost over book value is attributable to additional equipment with a 20-year life. The trial balances for Pueblo and Sorenson as of December 31, 2018 are as follows: Pueblo Corporation Sorenson Company Cash???????????????????. 4,050,000 2,840,000 FC Accounts receivable?????????? 5,270,000 3,990,000 Inventory???????????????? 5,540,000 5,800,000 Investment in Sorenson???????.. 20,969,000 Fixed Assets??????????????. 21,000,000 15,000,000 Accumulated Depreciation?????? (12,560,000) (6,800,000) Accounts Payable???????????.. (3,450,000) (1,580,000) Long-term Debt????????????.. (10,000,000) (5,000,000) Common Stock?????????????. (4,000,000) (3,000,000) Paid-in Capital in Excess of Par????.. (6,500,000) (2,000,000) Retained Earnings, Jan. 1, 2018????.. (12,180,000) (7,950,000) Sales???????????????????? (26,000,000) (10,000,000) Cost of Goods Sold???????????? 16,380,000 7,500,000 Operating expenses??????????.. 3,210,000 1,200,000 Subsidiary Income???????????.. (1,729,000) Totals?????????????????. 0 0 FC The investment in Sorenson consists of the following: Initial investment (12,000,000 FC x $1.20)?????????????.. $14,400,000 2016 Income (1,750,000 FC x $1.28)?????????????????. 2,240,000 2017 Income (2,000,000 FC x $1.30)?????????????????. 2,600,000 2018 Income??????????????????????????? 1,729,000 Totals????????????????????????????? $20,969,000 Relevant exchange rates are as follows: 1FC = January 1, 2016????????????.. $1.20 2016 Average?????????????. 1.28 January 1, 2017????????????.. 1.25 2017 Average?????????????. 1.30 December 31, 2018??????????. 1.31 2018 Average?????????????. 1.33 Assuming the FC is Sorenson?s function currency, prepare a consolidated worksheet.

 

Paper#2879 | Written in 18-Jul-2015

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