Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $114,800. At that dat

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Pop Corporation acquired 70 percent of Soda Company's voting
common shares on January 1, 20X2, for $114,800. At that date, the
noncontrolling interest had a fair value of $49,200 and Soda
reported $70,000 of common stock outstanding and retained earnings
of $25,000. The differential is assigned to buildings and
equipment, which had a fair value $22,000 higher than book
value and a remaining 10-year life, and to patents, which had a
fair value $47,000 higher than book value and a remaining life of
five years at the date of the business combination. Trial balances
for the companies as of December 31, 20X3, are as follows:
On December 31, 20X2, Soda purchased inventory for $30,000 and sold
it to Pop for $50,000. Pop resold $29,000 of the inventory (i.e.,
$29,000 of the $50,000 acquired from Soda) during 20X3 and had
the remaining balance in inventory at December 31, 20X3.

During 20X3, Soda sold inventory purchased for $54,000 to Pop for
$90,000, and Pop resold all but $26,000 of its purchase. On March
10, 20X3, Pop sold inventory purchased for $16,000 to Soda for
$32,000. Soda sold all but $8,000 of the inventory prior to
December 31, 20X3. Assume Pop uses the fully adjusted equity
method, that both companies use straight-line depreciation, and
that no property, plant, and equipment has been purchased since the
acquisition.

Pop Corporation Acquired 70 Percent Of Soda Company S Voting Common Shares On January 1 20x2 For 114 800 At That Dat 1 (102.33 KiB) Viewed 47 times

Income Statement Sales Other Income Less: COGS Less: Depreciation Expense Less: Interest Expense Less: Amortization Expense Income from Soda Company Consolidated Net Income NCI in Net Income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance POP CORPORATION & SUBSIDIARY Consolidated Financial Statement Worksheet For 20X3 Pop Corp. Soda Co. $ $ 0 0 $ 0 $ 0 0 0 GA Consolidation Entries DR CR 0 0 0 $ GA Consolidated 0 0 0 $ 0 $ O 0
Ending Balance Balance Sheet Cash and Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation Investment in Soda Company Patents Total Assets Accounts Payable Bonds Payable Bonds Premium Common Stock Retained Earnings NCI in NA of Soda Company Total Liabilities & Equity $ 0 167,000 $ 167,000 $ GA $ 0 $ 0 $ 0 $ 0 $ O GA 0 0 $ GA 0 $ 0 $ 0 $ 0 167,000 167,000 0