1/1/2009 Plymouth acquired 60% interest in Sander in exchangefor various considerations totaling $570,000. At...

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1/1/2009 Plymouth acquired 60% interest in Sander in exchangefor various considerations totaling $570,000. At the acquisitiondate,
NCI's FV: $380,000
Sander's BV: $850,000
Sander had developed internally a customer list that was notrecorded on its books but had an acquisition-date fair value of$100,000. This intangible asset is being amortized over 20years.
Plymouth sold Sander land with a book value of $60,000 on Jan.2, 2009, for $100,000. Sander still holds this land at the end ofthe current year.
Sander regularly transfers inventory to Plymouth. In 2009, itshipped inventory costing $100,000 to Plymouth at a price of$150,000. During 2010, intercompany shipments totaled $200,000,although the original cost to Sander was only $140,000. In each ofthese years, 20% of the merchandise was not resold to outsideparties until the period following the transfer.
Plymouth uses the partial equity method. Plymouth owes Sander$40,000 at the end of 2010.
A) Prepare the elimination entires needed to complete aconsolidation workpaper for 2010. Use the acquisition method toaccount for the non-controlling interests in Sander. Includeentries such as S, A, I, D, E, P, TI, G, ED, G, TL, GL, and anyif necessary.
B) Complete the consolidation worksheet for 2010 in thefollowing worksheet.
Pymouth and Sander
Consolidated Worksheet
Year Ending December 31, 2010
Accounts Plymouth Sander
Consolidation Entries
Debit
Consolidation Entries
Credit
Noncontrolling
Consolidated
Totals
Sales (800,000) (500,000) (TI)
Cost of Goods Sold 500,000 300,000 (G) (G)
(TI)
Operating expenses 100,000 60,000 (E)
Income of Sander (84,000) -0- (I)
Separate company net income (284,000) (140,000)
Consolidated net income
To noncontrolling interest
To parent
RE, 1/1/10--Plymouth (1,116,000) (TL)
(C)
RE, 1/1/10--Sander (620,000) (G)
(S)
Net income (above) (284,000) (140,000) (279,800)
Dividends 115,000 60,000 (D) 115,000
Retained Earnings, 12/31/10 (1,285,000) (700,000) (1,231,800)
Cash 177,000 90,000
Accounts recevable 356,000 410,000 (P)
Inventory 440,000 320,000 (G)
Investment in Sander 726,000 (D) (C)
(S)
(I)
(A)
Land 180,000 390,000 (TL)
Buildings and equipment (net) 496,000 300,000
Customer List (A) (E) 90,000
Total assets 2,375,000 1,510,000 3,157,000
Liabilities (480,000) (400,000) (P)
Common Stock (610,000) (320,000) (S)
Additional payed-in capital (90,000) (S)
Retained earnings, 12/31/10 (1,285,000) (700,000)
NCI in Sander, 1/1/10 (S)
(A)
NCI In Sander, 12/31/10
Total Liabilities and Equity (2,375,000) (1,510,000) (3,157,000)

Answer & Explanation Solved by verified expert

4.0 Ratings (553 Votes)

Part A Consolidation entries Entry TL Retained Earnings 40000 Land 40000 Unrealized land gain 100000 60000 Entry G Retained Earnings 10000 Cost of Goods Sold 10000 Unrealized Gross Profit from 2009 recognized in 2010 150000 X 20 30000 30000 X See Answer

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In: Accounting1/1/2009 Plymouth acquired 60% interest in Sander in exchangefor various considerations totaling $570,000. At the...1/1/2009 Plymouth acquired 60% interest in Sander in exchangefor various considerations totaling $570,000. At the acquisitiondate,NCI's FV: $380,000Sander's BV: $850,000Sander had developed internally a customer list that was notrecorded on its books but had an acquisition-date fair value of$100,000. This intangible asset is being amortized over 20years.Plymouth sold Sander land with a book value of $60,000 on Jan.2, 2009, for $100,000. Sander still holds this land at the end ofthe current year.Sander regularly transfers inventory to Plymouth. In 2009, itshipped inventory costing $100,000 to Plymouth at a price of$150,000. During 2010, intercompany shipments totaled $200,000,although the original cost to Sander was only $140,000. In each ofthese years, 20% of the merchandise was not resold to outsideparties until the period following the transfer.Plymouth uses the partial equity method. Plymouth owes Sander$40,000 at the end of 2010.A) Prepare the elimination entires needed to complete aconsolidation workpaper for 2010. Use the acquisition method toaccount for the non-controlling interests in Sander. Includeentries such as S, A, I, D, E, P, TI, G, ED, *G, TL, *GL, and anyif necessary.B) Complete the consolidation worksheet for 2010 in thefollowing worksheet.Pymouth and SanderConsolidated WorksheetYear Ending December 31, 2010AccountsPlymouthSanderConsolidation EntriesDebitConsolidation EntriesCreditNoncontrollingConsolidatedTotalsSales(800,000)(500,000)(TI)Cost of Goods Sold500,000300,000(G)(*G)(TI)Operating expenses100,00060,000(E)Income of Sander(84,000)-0-(I)Separate company net income(284,000)(140,000)Consolidated net incomeTo noncontrolling interestTo parentRE, 1/1/10--Plymouth(1,116,000)(*TL)(*C)RE, 1/1/10--Sander(620,000)(*G)(S)Net income (above)(284,000)(140,000)(279,800)Dividends115,00060,000(D)115,000Retained Earnings, 12/31/10(1,285,000)(700,000)(1,231,800)Cash177,00090,000Accounts recevable356,000410,000(P)Inventory440,000320,000(G)Investment in Sander726,000(D)(*C)(S)(I)(A)Land180,000390,000(*TL)Buildings and equipment (net)496,000300,000Customer List(A)(E)90,000Total assets2,375,0001,510,0003,157,000Liabilities(480,000)(400,000)(P)Common Stock(610,000)(320,000)(S)Additional payed-in capital(90,000)(S)Retained earnings, 12/31/10(1,285,000)(700,000)NCI in Sander, 1/1/10(S)(A)NCI In Sander, 12/31/10Total Liabilities and Equity(2,375,000)(1,510,000)(3,157,000)

Accounts	Plymouth	Sander	Consolidation Entries Debit	Consolidation Entries Credit	Consolidated Totals
Sales	(800,000)	(500,000)	(TI)
Cost of Goods Sold	500,000	300,000	(G)	(*G)
				(TI)
Operating expenses	100,000	60,000	(E)
Income of Sander	(84,000)	-0-	(I)
Separate company net income	(284,000)	(140,000)
Consolidated net income
To noncontrolling interest
To parent
RE, 1/1/10--Plymouth	(1,116,000)		(*TL)
			(*C)
RE, 1/1/10--Sander		(620,000)	(*G)
			(S)
Net income (above)	(284,000)	(140,000)			(279,800)
Dividends	115,000	60,000		(D)	115,000
Retained Earnings, 12/31/10	(1,285,000)	(700,000)			(1,231,800)
Cash	177,000	90,000
Accounts recevable	356,000	410,000		(P)
Inventory	440,000	320,000		(G)
Investment in Sander	726,000		(D)	(*C)
				(S)
				(I)
				(A)
Land	180,000	390,000		(*TL)
Buildings and equipment (net)	496,000	300,000
Customer List			(A)	(E)	90,000
Total assets	2,375,000	1,510,000			3,157,000
Liabilities	(480,000)	(400,000)	(P)
Common Stock	(610,000)	(320,000)	(S)
Additional payed-in capital		(90,000)	(S)
Retained earnings, 12/31/10	(1,285,000)	(700,000)
NCI in Sander, 1/1/10				(S)
				(A)
NCI In Sander, 12/31/10
Total Liabilities and Equity	(2,375,000)	(1,510,000)			(3,157,000)