Advanced accounting excel project

Please prepare worksheets using excel

Virginia State University
Reginald F. Lewis College of Business
Department of Accounting and Finance
FALL 2023 – CLASS PROJECT
ADVANCED ACCOUNTING – ACCT 403.
As the Senior Accountant of Ohio Corporation, you voted yes to support your Company’s acquisition of 80
percent of the 100,000 outstanding voting shares of Springfield Inc. for $6.70 per share on January 1, 2020.
The remaining 20 percent of Springfield’s shares also traded actively at $6.70 per share before and after
Ohio Corporation’s acquisition. An appraisal made on that date determined that all book values
appropriately reflected the fair values of Springfield’s underlying accounts except that a building with a 5year future life was undervalued by $57,000 and a fully amortized trademark with an estimated 10-year
remaining life had a $69,000 fair value. At the acquisition date, Springfield Inc. reported common stock of
$100,000 and a retained earnings balance of $224,000.
Following are the separate financial statements for the year ending December 31, 2021:
Sales
Cost of goods sold
Operating expenses
Dividend income
Net income
Ohio
Springfield,
Corporation
Inc.
$
(800,000) $ (379,500)
285,000
146,000
299,000
130,500
(16,000)
0
$
(232,000) $ (103,000)
Retained earnings, 1/1/21
Net income (above)
Dividends declared
Retained earnings, 12/31/21
$
Current assets
Investment in Devine, Inc.
Buildings and equipment (net)
Trademarks
Total assets
$
Liabilities
Common stock
Retained earnings, 12/31/21 (above)
Total liabilities and equities
$
$
$
(777,000) $ (294,000)
(232,000)
(103,000)
90,000
20,000
(919,000) $ (377,000)
238,500
536,000
870,000
137,000
1,781,500
$ 177,000
0
357,000
188,000
$ 722,000
(542,500) $ (245,000)
(320,000)
(100,000)
(919,000)
(377,000)
$ (1,781,500) $ (722,000)
At year-end, there were no intra-entity receivables or payables.
Required:
Johnson Kim, the CEO of your Company, needed to present information on the Acquisition of Springfield
Inc. at the Annual Shareholders and Directors Meeting scheduled for February 25, 2022. To fulfill this,
the CEO tasked you to perform the following:
a.
b.
c.
d.
Prepare a worksheet to consolidate these two companies as of December 31, 2021.
Prepare a 2021 consolidated income statement for Ohio Corporation and Springfield Inc.
Provide five reasons why your Company made that huge acquisition.
Provide examples of 5 acquisitions in the United States from 2000 – 2023. Include information on
the year of acquisition, the Parent Company’s name, the Subsidiary Company’s name, and
consideration transferred (amount paid) by the parent company. Please use the template below for
question d:
Year of Acquisition
Parent Company
Subsidiary
Consideration
Transferred
List the source of your information in the reference section of your work.
e. Considering the Net Income attributable to Ohio Corporation in the 2021 Consolidated Income
Statement, would you recommend your Company keep/sell all its investment in Springfield Inc.?
Why?
f. If, instead, the noncontrolling interest shares of Springfield Inc. had traded for $4.50 surrounding
Ohio Corporation’s acquisition date, what is the impact on goodwill?
Due Date: Monday, November 27, 2023.