1 answer

Tyler Company acquired all of Jasmine Company’s outstanding stock on January 1, 2016, for $280,200 in...

Question:

Tyler Company acquired all of Jasmine Company’s outstanding stock on January 1, 2016, for $280,200 in cash. Jasmine had a book value of only $199,400 on that date. However, equipment (having an eight-year remaining life) was undervalued by $56,000 on Jasmine’s financial records. A building with a 20-year remaining life was overvalued by $15,900. Subsequent to the acquisition, Jasmine reported the following:

Net Income Dividends Declared
2016 $ 79,800 $ 10,000
2017 64,200 40,000
2018 42,200 20,000

In accounting for this investment, Tyler has used the equity method. Selected accounts taken from the financial records of these two companies as of December 31, 2018, follow:

Tyler Company Jasmine Company
Revenues—operating $ (442,000 ) $ (167,000 )
Expenses 234,000 124,800
Equipment (net) 398,000 57,000
Buildings (net) 286,000 70,500
Common stock (290,000 ) (57,600 )
Retained earnings, 12/31/18 (586,000 ) (226,000 )

Determine the following account balances as of December 31, 2018:

a. Investment in Jasmine Company
b. Equity in Subsidiary Earnings
c. Consolidated Net Income
d. Consolidated Equipment (net)
e. Consolidated Buildings (net)
f. Consolidated Goodwill (net)
g. Consolidated Common Stock
h. Consolidated Retained Earnings, 12/31/18

Answers

Ansux @ Investiment an Pomine companys inves-lment = $aso,a00+ 79,800--10,000 +64,000 --- 40,000 +48,200–20.000 (6.285x3) = 3O con colidarled Equipment (net) :- consolidated equipment = 393,800 +57,000 +56,000 (15,00|2 )x3) $ 490,000 ci consolidaried& consolidatid common stock of consolidated common stock = 290,000 consolida led Retained Eaming Tamsalabated Relained Earni

.

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