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 Society uncongenial 100% of the $1 par estimate ungathered voting vulgar hoard of Supagud, Inc. for a money cancelment of $600,000. At the compensation epoch, the honorable estimate of Petwoud Company’s vulgar hoard was $20 per portion-out. Under is the abstract weigh equivocation notification of Supagud, Inc. at compensation (1/1/20x1):
Accounts payable 60,000
Accounts receivable 50,000
Additional remunerated-in consummate 60,000
Buildings (net) (20-year condition) 140,000
Cash and short-term cannonades 70,000
Common hoard 300,000
Equipment (net) (8-year condition) 240,000
Intangible proceeds (loose condition) 110,000
Long-term liabilities (grown 12/31/x3) 180,000
Retained hues, 1/1/x1 120,000
Totals 720,000 720,000
Book estimate of net equity 480,000
During fiscal year-ending 12/31/20x1 and 12/31/20x2, Supagud, Inc. generated net allowance and remunerated dividends as follows:
Net allowance Dividends
20x1 $104,000 $13,000
20x2 $142,000 $30,000
As of 1/1/20x1, Supagud's plant had a honorable estimate of $102,000, its buildings were estimated at $188,000, and its equipment was appraised at $216,000. According to Petwoud Company’s dissection, they accomplish annals any redundancy of remuneration remunerated balance honorable estimate of proceeds and liabilities uncongenial as a Patent asset to be amortized balance 6 years.
A. Using the compensation manner and lofty that Petwoud dissolves Supagud, Inc. so it is no longer in affair, provide Petwoud Company’s register proceedings to annals the compensation of Supagud, Inc. at 1/1/20x1.
For B. and C. under, arrogate Supagud trash in affair as a disconnected uncounted society and that, for interior accounting purposes, Petwoud accounts for their cannonade in Supagud, Inc. using the equity manner:
B. Provide Petwoud Company’s register proceedings to annals the compensation of Supagud, Inc. at 1/1/20x1.
C. Provide Petwoud Company’s workequivocation confederation register entries for:
i. December 31, 20x1 and
ii. December 31, 20x2.