Part 1: Mortar Corporation acquired 80% ownership of Granite…
Question Answered step-by-step Part 1: Mortar Corporation acquired 80% ownership of Granite… Part 1:Mortar Corporation acquired 80% ownership of Granite Company on January 1, 2007, for $173,000. At that date, the fair value of the non-controlling interest was $43, 250. On January 1, 2007, Granite’s book value for Common Stock was $50,000 & Retained Earnings was $100,000. Additional info:On January 1, 2007, Granite reported Buildings & Equipment with a book value of $150,000 and a fair value of $191,250. Granite’s depreciable assets had an estimated economic life of 11 years on the date of the combination. Assume that any goodwill impairment should be recorded as an adjustment in Mortar’s equity method accounts along with the differential components. Mortar uses the equity method in accounting for its investment in Granite.Give all journal entries recorded by Mortar with regard to its investment in Granite on the date of the combination, January 1, 2007. 2. Give all eliminating entries needed to for a full set of consolidated financial statements immediately following the combination. Show Book value calculations & excess value (differential) calculations (see below): Part 2: The trial balances for the two companies on December 31, 2007, included the following amounts:Image transcription textTrial Balance December 31, 2007Cash Accounts Receivable InventoryLand Buildings & Eq… Show more… Show more Additional information for 2007:Granite reported $60,000 of income and $20,000 of dividends in 2007.Also, detailed analysis of receivables and payables showed that Granite owed Mortar $16,000 on December 31, 2007.Give all journal entries recorded by Mortar with regard to its investment in Granite during 2007 Give all eliminating entries needed for a full set of consolidated financial statements for 2007. Show Book value calculations & excess value (differential) calculations (see last page): Part 3: The trial balances for the two companies on December 31, 2008, included the following amts:Image transcription textTrial Balance December 31, 2008Cash Accounts Receivable Invent01yLand Buildings & Eq… Show more… Show moreAdditional information for 2008:Granite reported $45,000 of income and $25,000 of dividends in 2008. At December 31, 2008, Mortar’s management reviewed the amount attributed to goodwill and concluded goodwill was impaired and should be reduced to $14,000. Also, detailed analysis of receivables and payables showed that Mortar owed Granite $9,000 on December 31, 2008.Give all journal entries recorded by Mortar with regard to its investment in Granite during 2008. Give all eliminating entries needed for a full set of consolidated financial statements for 2008. Show Book value calculations & excess value (differential) calculations (see last page): January 1, 2007Book Value Calculations: Excess Value (Differential) Calculations: December 31, 2007Book Value Calculations: Excess Value (Differential) Calculations: December 31, 2008Book Value Calculations: Excess Value (Differential) Calculations: Please show work! Thanks! Business Accounting BUISNESS 104 Share QuestionEmailCopy link Comments (0)
