Chapter 2, Exercise 2

Exercise 2-2
1A
Book value of total assset 460,000

Book value of current liability (80,000)
Book value of bonds payable (100,000)
Book value of net asset excluding goodwill 280,000
Book value of net asset excluding goodwill 280,000

Equipment unerdtated value 20,000
Fair value of net asset excluding goodwill 300,000
Fair value on subsidiary company 530,000

Fair value of net asset excluding goodwill less (300,000)
Goodwill 230,000
Company Parent
implied fair price Noncontorling interest
Value analysis achedule value (100%) value (0%)
Fair walue of subsidiary 530,000 530,000 not applicable
Fair walue of net asset excluding (300,000) (300,000)
Goodwill 230,000 230,000
Account title and explanation Debit Credit

Cash 20,000
Accounts receivable 70,000
Inventory 100,000
Property plant, and equipment 290,000
Goodwill 230,000
Current liabilities 80,000
Bonds payable 100,000
Cash 530,000
1B
Balance sheet for Glass Company
Liablity and stockhlders' Equity Amount Amount Assets

Liability Current assets
Current liabilities 220,000 Cash
Bonds payable 350,000 570,000 Accounts receivable
Stockholders' equity Inventory
Common stock 200,000 Property plant, and equipment
Retained earnings 280,000 480,000 Goodwill
1,050,000
2A
Debit Credit
Investment in Plastic Company 530,000
Cash 530,000
2B
Investment in Plastic appears as a long-term investment on Glass's unconsolidated balance sheet.
2C
The result (goodwill or gain on acquisition) of acquisition of Plastic Company will be shown in consolidated balance sheet as g
Amount Amount
30,000
120,000
150,000 300,000
d equipment 520,000
230,000
1,050,000
nsolidated balance sheet as good will is $230,000.

Exercise 2-5
Common Information
Ownership Interest
Market
Number of Price per
Cash Shares Share Total
Price Paid 0
Acquired Company's Balance Sheet Before Purchase

Market Book Market
Book Value Value Value Value
Assets Liabilities
Equity
Goodwill
Total
Liabilities
Total Assets 0 0 and Equity 0 0
Company
Implied Fair Parent
Value Analysis Value Price NCI Value
Price Paid
Fair Value of Net Assets
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Distribution of Excess
Schedule
Company Parent
Value Price NCI
Fair Value of Subsidiary
Less Book Value of Interest
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Excess of Cost over Book
Value
Worksheet
Accounts Adjusted Distribution
Goodwill
Gain on Acquisition
Total 0
Prepare the entries below

Exercise 2-6
Common Information
Ownership Interest
Market
Number of Price per
Price Paid Part A
Price Paid Part B
Price Paid Part C 0

Market
Book Value Value Book Value
Assets Liabilities
Equity
Goodwill
Total
Liabilities
Total Assets 0 0 and Equity 0
Part A Part B
Company
Implied Fair Parent
Value Analysis Value Price NCI Value Value Analysis
Price Paid Price Paid
Fair Value of Net
Fair Value of Net Assets Assets Excluding
Excluding Goodwill Goodwill
Goodwill Goodwill
Gain on Acquisition Gain on Acquisition
Determination and Determination and

Distribution of Excess Distribution of
Schedule Excess Schedule
Company Parent
Value Price NCI
Fair Value of Subsidiary Fair Value of Subsidiary
Less Book Value of Interest Less Book Value of
Acquired Interest Acquired
Common Stock Common Stock
Paid in Excess Paid in Excess
Retained Earnings Retained Earnings
Total Equity Total Equity
Interest Acquired Interest Acquired
Book Value Book Value
Excess of Cost over Book Excess of Cost over
Value Book Value
Worksheet
Accounts Adjusted Distribution Accounts Adjusted
Goodwill Goodwill
Gain on Acquisition Gain on Acquisition
Total 0 Total
Prepare the entries below Prepare the entries below

Market Value
0
Part C
Company
Company Implied Fair Parent Implied Parent
Value Price NCI Value Value Analysis Fair Value Price NCI Value
Price Paid
Fair Value of Net
Assets Excluding
Goodwill
Goodwill
Gain on Acquisition
Determination and
Distribution of
Excess Schedule
Parent Company Parent
Company Value Price NCI Value Price NCI
of Subsidiary Fair Value of Subsidiary
Less Book Value of
Interest Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Excess of Cost over
Book Value
Workshee Workshee
t t
Distributio Distributio
n Accounts Adjusted n
Goodwill
Gain on Acquisition
0 Total 0
e entries below Prepare the entries below

Exercise 2-7
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Market Book Market
Assets Liabilities
Equity
Goodwill
Total
Liabilities
Company
Implied Fair Parent
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company Parent
Value Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0

Exercise 2-9
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Market Book Market
Assets Liabilities
Equity
Goodwill
Total
Liabilities
Company
Implied Fair Parent
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company Parent
Value Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0

Problem 2-1
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Market Book Market
Assets Liabilities
Equity
Goodwill
Total
Liabilities
and
Total Assets 0 0 Equity 0 0
Company
Implied Fair Parent
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company Parent
Value Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0
Problem 2-1 Consolidated Worksheet

Balance sheet Eliminations NCI
Raabe Dalke Key Dr Key Cr
Other Current Assets 10,000 70,000
Inventory 120,000 60,000
Land 100,000 40,000
Building (net) 300,000 120,000
Equipment (net) 430,000 110,000
Investment in Dalke 720,000
Current Liabilities (180,000) (60,000)
Common Stock-Dalke (20,000)

Paid in Capital-Dalke (180,000)
Retained Earnings-Dalke (140,000)
Common stock - Raabe (58,000)

Paid in Capital in excess of
par (1,062,000)
Retained earnings- Raabe (380,000)
Totals 0 0
NCI
Totals
Eliminations and Adjustments
Entries Debit Credit

Consol.
Bal. Sht.
Problem 2-2
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Market Book Market
Assets Liabilities
Equity
Goodwill
Total
Liabilities
and
Company
Implied Fair Parent
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company Parent
Value Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0

Raabe Dalke Key Dr Key Cr
Other Current Assets 10,000 70,000
Inventory 120,000 60,000
Land 100,000 40,000
Building (net) 300,000 120,000
Equipment (net) 430,000 110,000
Investment in Duke 560,000
Current Liabilities (180,000) (60,000)
Common Stock-Dalke (20,000)

Paid in Capital -Dalke (180,000)
Retained Earnings-Duke (140,000)
Common stock - Raabe (54,000)

Paid in capital in excess of
par (906,000)
Retained earnings- Raabe (380,000)
Totals 0 0
NCI
Totals

Entries Debit Credit
Consol.
Bal. Sht.
Problem 2-3
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Market Book Market
Assets Liabilities
Equity
Goodwill
Total
Liabilities
and
Company
Implied Fair Parent
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company Parent
Value Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0
Prepare the entries below: Debit Credit

Problem 2-4
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Market Book Market
Assets Liabilities
Equity
Goodwill
Total
Liabilities
and
Company
Implied Fair Parent
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company Parent
Value Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0

Problem 2-5
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Market Book Market
Assets Liabilities
Equity
Goodwill
Total
Liabilities
and
Company
Implied Fair Parent
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company Parent
Value Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0

Problem 2-6
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Book Market Book Market
Value Value Value Value
Assets Liabilities
Equity
Goodwill
Total
Liabilities
and
Company
Implied Parent
Value Analysis Fair Value Price NCI Value
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company Parent
Value Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0

Adam Sampson Key Dr Key Cr
Cash 160,000 40,000
Accounts receivable 70,000 30,000
Inventory 130,000 120,000
Investment in Subsidiary 475,000
Land 50,000 35,000

Building and equipment 350,000 230,000
Accumulated depreciation (100,000) (50,000)
Copyright 40,000 10,000
Goodwill
Current liabilities (192,000) (65,000)
Bonds payable (100,000)
Common stock - Samson (50,000)

Paid-in excess - Sampson (70,000)
Retained earnings - Sampson (130,000)
Common stock - Adam (100,000)

Paid-in excess - Adam (250,000)
Retained earnings- Adam (633,000)
Totals 0 0
NCI
Totals

Consol.
Bal. Sht.
Problem 2-7
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Assets Liabilities
Equity
Goodwill
Total
Liabilities
and
Company
Implied Parent
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company Parent
Value Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0

Adam Sampson Key Dr Key Cr
Cash 255,000 40,000
Inventory 130,000 120,000
Land 50,000 35,000

Building and equipment 350,000 230,000
Copyright 40,000 10,000
Goodwill
Bonds payable (100,000)
Common stock - Samson (50,000)

Paid-in excess - Sampson (70,000)
Retained earnings - Sampson (130,000)
Common stock - Adam (100,000)

Paid-in excess - Adam (250,000)
Retained earnings- Adam (633,000)
Totals 0 0
NCI
Totals

Consol.
Bal. Sht.
Problem 2-8
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Assets Liabilities
Equity
Goodwill
Total
Liabilities
and
Company
Implied Parent
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company Parent
Value Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0

Palto Saleen Key Dr Key Cr
Cash 61,000
Inventory 80,000 50,000
Land 100,000 40,000

Buildings 250,000 200,000
Equipment 90,000 60,000
Goodwill
Bonds payable (200,000) (100,000)
Common stock - Saleen (10,000)

Paid-in excess - Saleen (90,000)
Retained earnings - Saleen (60,000)
Common stock - Palto (20,000)

Paid-in excess - Palto (180,000)
Retained earnings- Palto (546,000)
Totals 0 0
NCI
Totals
Consol.
Bal. Sht.
Problem 2-9
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Assets Liabilities
Equity
Goodwill
Total
Liabilities
and
Company
Implied Parent
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company Parent
Value Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0

Cash 161,000
Inventory 80,000 50,000
Land 100,000 40,000

Buildings 250,000 200,000
Equipment 90,000 60,000
Goodwill
Bonds payable (200,000) (100,000)


Totals 0 0
NCI
Totals
Consol.
Bal. Sht.
Problem 2-10
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Assets Liabilities
Equity
Goodwill
Total
Liabilities
and
Company
Implied Parent
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company Parent
Value Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0

Cash 161,000
Inventory 80,000 50,000
Land 100,000 40,000

Buildings 250,000 200,000
Equipment 90,000 60,000
Goodwill
Bonds payable (200,000) (100,000)


Totals 100,000 0
NCI
Totals
Consol.
Bal. Sht.
Problem 2-11
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Assets Liabilities
Equity
Goodwill
Total
Liabilities
and
Company
Implied Parent
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company Parent
Value Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0

Paltp Saleen Key Dr Key Cr
Cash 261,000
Inventory 80,000 50,000
Land 100,000 40,000

Buildings 250,000 200,000
Equipment 90,000 60,000
Goodwill
Bonds payable (200,000) (100,000)


Totals 0 0
NCI
Totals
Consol.
Bal. Sht.
Problem 2-12
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Market Book Market
Assets Liabilities
Equity
Goodwill
Total
Liabilities
and
Company
Implied Fair Parent
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company Parent
Value Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0

Purnell Sentinel Key Dr Key Cr
Cash 20,000
Inventory 410,000 120,000
Investment in Subsidiary 1,100,000
Land 800,000 100,000

Buildings 2,800,000 300,000
Equipment 600,000 140,000
Patent 10,000
Computer software
Goodwill 60,000
Bonds payable (300,000) (200,000)
Premium on bonds payable
Common stock - Sentinel (10,000)
Paid-in excess - Sentinel (190,000)
Retained earnings - Sentinel (140,000)
Common stock - Purnell (95,000)

Paid-in excess - Purnell (3,655,000)
Retained earnings- Purnell (1,100,000)
Totals 0 0
NCI
Totals
Consol.
Bal. Sht.
Problem 2-13
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Book Market
Book Value Market Value Value Value
Assets Liabilities
Equity
Goodwill
Total
Liabilities
and
Company
Implied Fair
Value Analysis Value Parent Price NCI Value
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company
Value Parent Price NCI
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Value
Worksheet
Goodwill
Gain on Acquisition
Total 0
Balance sheet Eliminations

Cash 20,000
Inventory 410,000 120,000
Land 800,000 100,000

Buildings 2,800,000 300,000
Equipment 600,000 140,000
Patent 10,000
Computer software
Goodwill 60,000
Bonds payable (300,000) (200,000)

Totals 0 0 0 0
NCI
Totals
NCI Consol.
Bal. Sht.
0 0
0
Problem 2-14
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Book Market
Book Value Market Value Value Value
Assets Liabilities
Equity
Goodwill
Total
Liabilities
and
Company
Implied Fair
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and
Schedule
Company
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Excess of Cost over Book Value
Worksheet
Goodwill
Gain on Acquisition
Total 0

Cash 20,000
Inventory 410,000 120,000
Land 800,000 100,000

Buildings 2,800,000 300,000
Equipment 600,000 140,000
Patent 10,000
Computer software
Goodwill 60,000
Bonds payable (300,000) (200,000)

Totals 0 0
NCI
Totals
Eliminations:
NCI Consol.
Bal. Sht.
Problem 2-15
Common Information
Ownership Interest
Market
Number of Price per
Price Paid 0

Book
Book Value Market Value Value
Assets Liabilities
Equity
Goodwill
Total Liabilities
Total Assets 0 0 and Equity 0
Company
Implied Fair
Price Paid
Excluding Goodwill
Goodwill
Gain on Acquisition
Determination and Distribution

of Excess Schedule
Company
Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Excess of Cost over Book Value
Worksheet
Goodwill
Gain on Acquisition
Total 0

Purnell Sentinel Key Dr Key
Cash 20,000
Inventory 410,000 120,000
Land 800,000 100,000

Buildings 2,800,000 300,000
Equipment 600,000 140,000
Patent 10,000
Computer software
Goodwill 60,000
Bonds payable (300,000) (200,000)

Totals 0 0
NCI
Totals
Eliminations:
Market
Value
0
NCI Consol.
Cr Bal. Sht.

Chapter 2, Exercise 2

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Chapter 2, Exercise 2

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Exercise 2-2

Book value of total assset 460,000

Book value of net asset excluding goodwill 280,000

Fair value on subsidiary company 530,000

Account title and explanation Debit Credit

Liablity and stockhlders' Equity Amount Amount Assets

Investment in Plastic appears as a long-term investment on Glass's unconsolidated balance sheet.

nsolidated balance sheet as good will is $230,000.

Acquired Company's Balance Sheet Before Purchase

Prepare the entries below

Acquired Company's Balance Sheet Before Purchase

Determination and Determination and

Prepare the entries below Prepare the entries below

e entries below Prepare the entries below

Acquired Company's Balance Sheet Before Purchase

Prepare the entries below

Acquired Company's Balance Sheet Before Purchase

Prepare the entries below

Acquired Company's Balance Sheet Before Purchase

Problem 2-1 Consolidated Worksheet

Current Liabilities (180,000) (60,000)

Common Stock-Dalke (20,000)

Common stock - Raabe (58,000)

Eliminations and Adjustments

Entries Debit Credit

Acquired Company's Balance Sheet Before Purchase

Problem 2-2 Consolidated Worksheet

Current Liabilities (180,000) (60,000)

Common Stock-Dalke (20,000)

Common stock - Raabe (54,000)

Eliminations and Adjustments

Acquired Company's Balance Sheet Before Purchase

Prepare the entries below: Debit Credit

Acquired Company's Balance Sheet Before Purchase

Prepare the entries below: Debit Credit

Acquired Company's Balance Sheet Before Purchase

Prepare the entries below: Debit Credit

Acquired Company's Balance Sheet Before Purchase

Problem 2-6 Consolidated Worksheet

Land 50,000 35,000

Common stock - Samson (50,000)

Common stock - Adam (100,000)

Eliminations and Adjustments

Acquired Company's Balance Sheet Before Purchase

Problem 2-7 Consolidated Worksheet

Land 50,000 35,000

Common stock - Samson (50,000)

Common stock - Adam (100,000)

Eliminations and Adjustments

Acquired Company's Balance Sheet Before Purchase

Problem 2-8 Consolidated Worksheet

Land 100,000 40,000

Common stock - Saleen (10,000)

Common stock - Palto (20,000)

Acquired Company's Balance Sheet Before Purchase

Problem 2-9 Consolidated Worksheet

Land 100,000 40,000

Common stock - Saleen (10,000)

Common stock - Palto (20,000)

Acquired Company's Balance Sheet Before Purchase

Problem 2-10 Consolidated Worksheet

Land 100,000 40,000

Common stock - Saleen (10,000)