Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. for this assignment, read the case facts below and

For this assignment, read the case facts below and then create an Excel spreadsheet using...

70.2K

Verified Solution

Question

Accounting

For this assignment, read the case facts below and then create an Excel spreadsheet using the guidance at the end of the case.

On January 1, 2023, PondBlue Company purchased 100 percent of the outstanding voting stock of SweetWater, Inc., for $1,000,000 in cash and other consideration. At the purchase date, SweetWater had common stock of $500,000 and retained earnings of $185,000. PondBlue attributed the excess of acquisition-date fair value over Stillwater's book value to a trade name with an estimated 25-year remaining useful life. Pondblue uses the equity method to account for its investment in SweetWater.

During the next two years, SweetWater reported the following:

Income Dividends Declared Inventory Transfers to PondBlue at Transfer Price
2023 $78,000 $25,000 $190,000
2024 85,000 27,000 210,000

Create an Excel spreadsheet that computes the following:

  1. Equity method balance in PondBlue's Investment in SweetWater, Inc., account as of December 31, 2024.
  2. Worksheet adjustments for the December 31, 2024, consolidation of PondBlue and SweetWater.

Formulate your solution so that SweetWater's gross profit rate on sales to James is treated as a variable.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students