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Problem 5-19
a.)
b.)
Prepare Doone's 2013 consolidation entries required by the intra-entity inventory transfers.
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P05-19
ty inventory transfers.
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P05-35
Student Name:
Class:
Problem 05-35
Part A.
Life in
years
Consideration transferred
Noncontrolling interest fair value
Subsidiary fair value at acquisition-date
Book value
Fair value in excess of book value
Excess fair value assignment to customer list
Consolidation entries:
Entry
Entry
Entry
Entry
Entry
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Annual
Excess
Amort.
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Entry
Entry
Entry
Entry
Entry
Entry
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P05-35
GIBSON AND KELLER
Consolidation Worksheet
Year Ending December 31, 2013
Consolidation Entries
Accounts
Sales
Gibson
Keller
Debit
(800,000)
(500,000)
500,000
300,000
Operating expenses
100,000
60,000
Income of Keller
(84,000)
(284,000)
(140,000)
To parent
Retained earnings, 1/1/13
- Gibson
(1,116,000)
- Keller
Net Income
Dividends
Retained earnings, 12/31/13
(620,000)
(284,000)
(140,000)
115,000
60,000
(1,285,000)
(700,000)
Cash
177,000
90,000
Accounts receivable
356,000
410,000
Inventory
440,000
320,000
Investment in Keller
726,000
Land
180,000
390,000
496,000
300,000
2,375,000
1,510,000
Liabilities
(480,000)
(400,000)
Common stock
(610,000)
(320,000)
(1,285,000)
(700,000)
(2,375,000)
(1,510,000)
Customer list
Total assets
(90,000)
Noncontrolling interest in
Keller, 1/1/13
Noncontrolling interest in
Keller, 12/31/13
Total liabilities and equity
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Credit
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Part b. How would the consolidation entries in requirement (a) have differed if Gibson
had sold a building with a $600,000 book value (cost of $140,000) to Keller for $100,000 instead of
land, as the problem reports?
Entry
Entry
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Noncontrolling
Consolidated
Interest
Totals
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0 instead of
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Given P05-35
Given Data P05-35
Part a. facts:
Gibson acquired interest in Keller 1/1/2012
Various considerations given for acquisition
Fair value of noncontrolling interest at acquisition
Keller's book value
Value assigned to Keller customer list
Keller customer list - life for purposes of amortization
Book value of land Gibson sold to Keller on 1/2/2012
Price paid by Keller for Gibson's land
Cost of inventory shipped by Keller to Gibson in 2012
Price paid by Gibson for 2012 inventory
Cost of intra-entity shipments by Keller to Gibson in 2013
Price paid by Gibson for 2013 intra-entity shipments
Percentage of inventory resold in period following transfer
Amount Gibson owes Keller at end of 2013
Part b. facts:
Building sold to Keller instead of land
Book value of building Gibson sold to Keller
Price paid by Keller for Gibson building
Cost of building
Remaining life at date of transfer
$
$
$
$
$
$
$
$
$
$
$
$
$
$
60%
570,000
380,000
850,000
100,000
20
60,000
100,000
100,000
150,000
140,000
200,000
20%
40,000
60,000
100,000
140,000
10
Sales
Cost of goods sold
Operating expenses
Income of Keller Company
Net income
Gibson
Keller
Company
Company
$ (800,000) $ (500,000)
500,000
300,000
100,000
60,000
(84,000)
$ (284,000) $ (140,000)
$ (1,116,000) $
(284,000)
115,000
$ (1,285,000) $
Cash
Accounts receivable
Inventory
Investment in Keller Company
Land
Buildings and equipment (net)
Total assets
Liabilities
Common stock
Additional paid-in capital
(480,000) $
(610,000)
-
177,000
316,000
440,000
766,000
180,000
496,000
$ 2,375,000
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(620,000)
(140,000)
60,000
(700,000)
90,000
410,000
320,000
390,000
300,000
$ 1,510,000
(400,000)
(320,000)
(90,000)
Given P05-35
Retained earnings, 12/31/13
Total liabilities and equities
(1,285,000)
(700,000)
$ (2,375,000) $ (1,510,000)
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