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Problem 11-3 (LO 3, 5);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 Soren-;son Company, a foreign company, on January 1, 2016. Pueblo paid 12,000,000 FC, and Soren-;son?s equity consisted of the following;Commonstock...................................... 3,000,000FC;Paid-incapitalinexcess of par............... 2,000,000;Retained earnings...............................4,200,000;Total.............................................. 9,200,000FC;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 trialbalances for PuebloandSorenson asof December 31,2018,are asfollows;PuebloCorporation 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-TermDebt............................... (10,000,000) (5,000,000);CommonStock............................... (4,000,000) (3,000,000);Paid-InCapital inExcess ofPar................... (6,500,000) (2,000,000);Retained Earnings,January 1,2018............... (12,180,000) (7,950,000);Sales....................................... (26,000,000) (10,000,000);Costof GoodsSold............................ 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 ?$1.20)................ $14,400,000;2016Income (1,750,000 FC ?$1.28).................... 2,240,000;2017Income (2,000,000 FC ?$1.30).................... 2,600,000;2018Income......................................... 1,729,000;Total.............................................. $20,969,000;Relevant exchange rates are as follows;1FC =;January 1,2016................... $1.20;2016Average..................... 1.28;January 1,2017................... 1.25;2017Average..................... 1.30;December 31,2018................ 1.31;2018Average..................... 1.33;Assuming the FC is Sorenson?s functional currency, prepare a consolidated worksheet

 

Paper#73975 | Written in 18-Jul-2015

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