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Student Name:
Class:
Problem 02-24
50,000
(10,000)
100,000
40,000
(5,000)
$
495,000
265,000
230,000
Correct!
175,000
55,000
Correct!
Accounts
Cash
Receivables
Inventory
Investment in Spider
Computer software
Buildings (net)
Equipment (net)
Client contracts
R & D asset
Goodwill
Total assets
Accounts payable
Notes payable
Common stock
Additional paid-in capital
Retained earnings
Total liabilities and equities
Pratt
Spicer
36,000 $
18,000
116,000
52,000
140,000
90,000
495,000
210,000
595,000
308,000
-
20,000
130,000
40,000
-
1,900,000 $
350,000
(88,000) $
(510,000)
(380,000)
(170,000)
(752,000)
$ (1,900,000) $
(25,000)
(60,000)
(100,000)
(25,000)
(140,000)
(350,000)
$
$
Page 1
Consolidation Entries
Debit
Credit
P02-24
PRATT COMPANY AND SUBSIDIARY
Consolidated Balance Sheet
December 31, 2013
Assets
Cash
Receivables
Inventory
Computer software
Buildings (net)
Equipment (net)
Client contracts
R & D asset
Goodwill
Total assets
Liabilities and Owners' Equity
Accounts payable
Notes payable
Common stock
Additional paid-in capital
Retained earnings
Total liabilities and equities
Page 2
P02-24
Consolidated
Totals
$
54,000
168,000
230,000
495,000
$
$
230,000
725,000
348,000
2,250,000
(113,000)
(570,000)
(480,000)
(195,000)
(892,000)
$ (2,250,000)
Correct!
Correct!
Correct!
Try again!
Try again!
Correct!
Try again!
Try again!
Try again!
Try again!
Try again!
Correct!
Try again!
Try again!
Try again!
Try again!
Try again!
Page 3
P02-24
Page 4
P02-29
Student Name:
Class:
Problem 02-29
Part C only:
PACIFICA INC., AND SEGUROS CO.
Consolidation Worksheet
December 31, 2012
Consolidation Entr
Accounts
Revenues
Expenses
Net income
Pacifica
(1,200,000)
890,000
(310,000)
(950,000)
(310,000)
90,000
(1,170,000)
Seguros
Correct!
Cash
Receivables and inventory
Property, plantm and equipment
Investment in Seguros
86,000
750,000
1,400,000
1,062,500
300,000
3,598,500
160,000
885,000
Liabilities
Contingent performance obligation
Common stock
Additional paid-in capital
Retained earnings
Total liabilities and equities
(500,000)
(62,500)
(650,000)
(1,216,000)
(1,170,000)
(3,598,500)
(180,000)
(200,000)
(70,000)
(435,000)
(885,000)
Correct!
85,000
190,000
450,000
-
Correct!
COMMON SHARES
MARKET VALUE
USD
PAR VALUE
CASH
DISCOUNT RATE
50000
20
1,000,000.00
5
750,000.00
250,000.00
130,000.00
4%
Page 5
1225
[A]
[A]
[A]
[A]
[S]
[S]
[S]
P02-29
%
PVALUE=
50%
$62,500.00
$1,062,500.00
A)
B)
C)
common Stock issuance costs
Cash
Page 6
$1,062,500.00
$ 705,000.00
357,500.00
P02-29
ALLOCATIONS MADE TO SPECIFIC ACCOUNTS BASED ON ACQUISITION DATE
FAIR AND BOOK VALUE DIFFERENCES:
Receivables and inventory
(10,000.00)
Property, plant, and equipment
150,000.00
Trademarks
40,000.00
Reasearch & Development
100,000.00
EXCESS FAIR VALUE NOT IDENTIFIED WITH SPECIFIC ITEMS- GOODWILL
Page 7
280,000.00
77,500.00
P02-29
EGUROS CO.
rksheet
2012
Consolidation Entries
Debit
Credit
Consolidated
Totals
(1,200,000)
890,000
(310,000)
(950,000)
(310,000)
90,000
(1,170,000)
Correct!
[A]
10,000
[S]
[A]
705,000
357,500
150,000
100,000
77,500
40,000
200,000
70,000
435,000
1,072,500
Correct!
1,072,500
Correct!
171,000
930,000
2,000,000
-
Correct!
100,000
77,500
500,000
3,778,500
Correct!
(680,000)
(62,500)
(650,000)
(1,216,000)
(1,170,000)
(3,778,500)
Correct!
Correct!
Page 8
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
Correct!
P02-29
DR.
CR.
1,062,500.00
$62,500.00
250,000.00
750,000.00
15000
15000
9000
9000
Page 9
P02-29
Page 10
Given P02-29
Given Data P02-29:
Seguros Company outstanding voting shares
acquired by Pacifica Inc.
Pacifica Company's $5 par common stock issued
for acquisitionnumber of shares
Market value of Pacifica stock at acquisition date
Cash paid by Pacifica when Seguros meets certain goals
Fair value of Seguros R & D project
Profitability percentage needed for Seguros to meet goals
Discount rate used to represent time value of money
Legal fees paid by Pacifica in connection with acquisition
Stock issuance costs paid by Pacifica
Seguros Company fully amortized patentvalue
Revenues
Expenses
Net income
Retained earnings, 1/1/12
Net income
Dividends paid
Retained earnings, 12/31/12
Cash
Receivables and inventory
Property, plant, and equipment
Trademarks
Total assets
Liabilities
Common stock
Additional paid-in capital
Retained earnings
Total liabilities and equities
110,000
750,000
1,400,000
300,000
$ 2,560,000
$
(500,000)
(400,000)
(475,000)
(1,185,000)
$ (2,560,000)
$
$
$
$
$
$
50,000
20
130,000
100,000
50%
4%
15,000
9,000
30,000
Seguros Company
Book
Fair
Values
Values
Pacifica, Inc.
$ (1,200,000)
875,000
$
(325,000)
$
(950,000)
(325,000)
90,000
$ (1,185,000)
$
100%
$
$
85,000 $
190,000
450,000
160,000
885,000
(180,000) $
(200,000)
(70,000)
(435,000)
(885,000)
Page 11
85,000
180,000
600,000
200,000
(180,000)