HU Consolidated Balance Sheet & Bonds Purchases Excel Worksheets

Consolidated Balance Sheet
Prepare a Consolidated Balance Sheet for Big Lake Bakeries which owns 100%
of Marble Falls Orchards. The fair value of Marble Falls net fixed assets are
$2,675,000.
Big Lake aquired 100% of Marble Falls for
Fair value of fixed assets
Balance Sheet prior to
acquistion
Current assets
fixed assets, net
Liabilties
Common Stock
Paid in Capital
Retained Earnings
Big Lake
4,250,000
4,500,000
350,000
7,500,000
500,000
400,000
3,750,000
2,675,000
Marble Falls
500,000
1,675,000
125,000
1,525,000
1. Determine the Fair Value of Marble Falls’ net assets.
Account
Fair Value
Fair Vaue of assets
2. Calculate Goodwill
Purchase Price
Fair value of assets
Goodwill
2. Prepared journal entries on Big Lake’s Books
Worksheet
Initial purchase
less equity balances
difference
less goodwill
Step up in Net assets
525,000
a. Prepare purchase entry
Debit
Credit
b. Prepare consolidated journal entry to consolidate equity accounts
c. Prepare consolidated journal entry to consolidate assets
3.Prepare Consolidated balance Sheet
Big Lake
Current assets
Fixed Assets
Investment in Marble Falls
Good will
Total
Liabilites
Common Stock
Paid in Capital
Retained Earnings
Total
Marble Falls
Debit
Credit
Consolidated
balances
Equity Investments; Fair Value vs Equity Method
On January 2, 2018, Killeen Nurseries Inc. bought 5% of Creasote’s capital stock for $103 million.
Creasotes’s net income for the year ended December 31, 2018, was $133 million. The fair value of the
shares held by Killeenn was $124 million at December 31, 2018. During 2018, Creasote declared a
dividend of $66 million. If no entry is neded, place N\A on Journal.
Required:
1. Prepare all appropriate journal entries related to the investment
Event
General Journal
1
Investment
2
Income ?
3
Dividend ?
4
FV adj ?
Debit
Credit
Assume that Killeen purchased a 20% stake in Bluebonnet inc 420,000 shares for $500,000 at the
beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of
AMC’s net assets were equal. During the year, AMC earned net income of $270,000 and distributed cash
dividends of 25 cents per share. At year-end, the fair value of the shares is $527,000. If no entry is
neded, place N\A on Journal.
Event
General Journal
1
Investment
2
Income ?
3
Dividend ?
4
FV adj ?
Debit
Credit
$103 million.
he fair value of the
ote declared a
500,000 at the
and book value of
and distributed cash
0. If no entry is