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Acct 559 Class Project Case 2 (2014)




Question;Consolidated Worksheet at End of First Year of OwnershipPierce Corporation acquired 75 percent of Bryan Company?s ownership on January 1, 2013 for $ 96,000. At that date, the fair value of the noncontrolling interest was $32,000. The book value of Bryan?s net assets at acquisition was $100,000. The book values and fair values of Bryan?s assets and liabilities were equal, except for Bryan?s buildings and equipment, which were worth $20,000 more than book value. Buildings and equipment are depreciated on a 10-year basis.Although goodwill is not amortized, the management of Pierce concluded at December 31, 2013 that goodwill from its purchase of Bryan shares had been impaired and the correct carrying amount was $2,500. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders.Trial balance for data for Pierce and Bryan on December 31, 2013 are as follows:Pierce Corporation Bryan CompanyItem Debit Credit Debit CreditCash $ 47,500 $ 21,000Accounts Receivable 70,000 12,000Inventory 90,000 25,000Land 30,000 15,000Buildings and Equipment 350,000 150,000Investment in Bryan Co. Stock 96,375Cost of Goods Sold 125,000 110,000Wage Expense 42,000 27,000Depreciation Expense 25,000 10,000Interest Expense 12,000 4,000Other Expenses 13,500 5,000Dividends Declared 30,000 16,000Accumulated Depreciation $ 145,000 $ 40,000Accounts Payable 45,000 16,000Wages Payable 17,000 9,000Notes Payable 150,000 50,000Common Stock 200,000 60,000Retained Earnings 102,000 40,000Sales 260,000 180,000Income from Subsidiary 12,375-------------------------------- -----------------------------Totals $ 931,375 $ 931,375 $ 395,000 $ 395,000======================= ====================Requirements:a. Prepare the elimination entries in general journal form.b. Prepare a consolidated worksheet as of December 31, 2013.


Paper#40849 | Written in 18-Jul-2015

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