Pullman, Inc. acquired a controlling interest in Sierra Company on 1/1/20×1. At that time, the book value of Sierra Company’s net assets was $16,970,000, including the following:
On 1/1/20x1, Petwoud Concourse presumed 100% of the $1 par compute unappropriated voting low accumulation of Supagud, Inc. for a coin acquittal of $600,000. At the compensation bound, the unspotted compute of Petwoud Company’s low accumulation was $20 per divide. Adown is the epitome counteract subterfuge instruction of Supagud, Inc. at compensation (1/1/20x1):
Accounts payable 60,000
Accounts receivable 50,000
Additional hired-in high 60,000
Buildings (net) (20-year condition) 140,000
Cash and short-term investments 70,000
Common accumulation 300,000
Equipment (net) (8-year condition) 240,000
Intangible goods (vague condition) 110,000
Long-term liabilities (confirmed 12/31/x3) 180,000
Retained hues, 1/1/x1 120,000
Totals 720,000 720,000
Book compute of net equity 480,000
During fiscal year-ending 12/31/20x1 and 12/31/20x2, Supagud, Inc. generated net proceeds and hired dividends as follows:
Net proceeds Dividends
20x1 $104,000 $13,000
20x2 $142,000 $30,000
As of 1/1/20x1, Supagud's place had a unspotted compute of $102,000, its buildings were computed at $188,000, and its equipment was appraised at $216,000. According to Petwoud Company’s dissection, they procure annals any redundancy of remuneration hired aggravate unspotted compute of goods and liabilities presumed as a Patent asset to be amortized aggravate 6 years.
A. Using the compensation rule and showy that Petwoud dissolves Supagud, Inc. so it is no longer in trade, provide Petwoud Company’s life annals to annals the compensation of Supagud, Inc. at 1/1/20x1.
For B. and C. adown, presume Supagud offal in trade as a disjoined easy concourse and that, for interior accounting purposes, Petwoud accounts for their investment in Supagud, Inc. using the equity rule:
B. Provide Petwoud Company’s life annals to annals the compensation of Supagud, Inc. at 1/1/20x1.
C. Provide Petwoud Company’s worksubterfuge confederation life entries for:
i. December 31, 20x1 and
ii. December 31, 20x2.