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    P3-28, 20, 21, 22

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    1. Patrick Company acquired O'Brien Company for $550,000 cash and recorded the assets and liabilities of O'Brien at their fair values. Goodwill of $55,000 was recognized. 2. In a later year, Patrick acquired Abernethy Company in a series of transactions where assets and liabilities were recorded at fair value. Goodwill of $120,000 was recognized in one transaction and $50,000 in another. 3. The document provides journal entries and consolidation worksheets to record these business combinations and other transactions between the companies over multiple years.

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    P3-28, 20, 21, 22

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    45 views8 pages
    1. Patrick Company acquired O'Brien Company for $550,000 cash and recorded the assets and liabilities of O'Brien at their fair values. Goodwill of $55,000 was recognized. 2. In a later year, Patrick acquired Abernethy Company in a series of transactions where assets and liabilities were recorded at fair value. Goodwill of $120,000 was recognized in one transaction and $50,000 in another. 3. The document provides journal entries and consolidation worksheets to record these business combinations and other transactions between the companies over multiple years.

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    Advanced Accounting P3-28, 20, 21, 22

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    1. Patrick Company acquired O'Brien Company for $550,000 cash and recorded the assets and liabilities of O'Brien at their fair values. Goodwill of $55,000 was recognized. 2. In a later year, Patrick acquired Abernethy Company in a series of transactions where assets and liabilities were recorded at fair value. Goodwill of $120,000 was recognized in one transaction and $50,000 in another. 3. The document provides journal entries and consolidation worksheets to record these business combinations and other transactions between the companies over multiple years.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    45 views8 pages

    P3-28, 20, 21, 22

    Uploaded by

    jyraEB9390
    1. Patrick Company acquired O'Brien Company for $550,000 cash and recorded the assets and liabilities of O'Brien at their fair values. Goodwill of $55,000 was recognized. 2. In a later year, Patrick acquired Abernethy Company in a series of transactions where assets and liabilities were recorded at fair value. Goodwill of $120,000 was recognized in one transaction and $50,000 in another. 3. The document provides journal entries and consolidation worksheets to record these business combinations and other transactions between the companies over multiple years.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 8

    Chapter 3: 28, 20, 21, 22

    28 Investment in O'Brien 222,000


    Equity in O'Brien 222,000
    Amortizatio
    Fair value of allocations Life ns
    Trademarks 100,000 - -
    Customer Relationships 75,000 5 15,000
    Equipment (30,000) 10 (3,000)
    Total 145,000 12,000

    Cash paid 550,000


    Book value over assets received 350,000
    Fair value in excess of book value 200,000
    Total fair value of allocations 145,000
    Goodwill 55,000

    Cash 80,000
    Investment in O'Brien 80,000

    Equity in O'Brien 12,000


    Investment in O'Brien 12,000

    S
    Retained Earnings 1/1 250,000
    Common Stock 100,000
    Investment in O'Brien 350,000

    A
    Trademark 100,000
    Customer Relationships 75,000
    Goodwill 55,000
    Equipment 30,000
    Investment in O'Brien 200,000

    I
    Equity in O'Brien 210,000
    Investment in O'Brien 210,000

    D
    Investment in O'Brien 80,000
    Dividends Declared 80,000

    E
    Equipment 3,000
    Depreciation Expense 3,000

    Amortization Expense 15,000


    Customer Relationships 15,000

    Equity in O'Brien
    222,000
    12,000
    210,000

    Investment in O'Brien
    680,000
    350,000
    200,000
    210,000
    80,000
    -

    Patrick Company and O'Brien Company


    Consolidation Worksheet
    For Year Ending December 31, 2015

    Consolidation Entries

    Patrick Small Debit


    Revenues (1,125,000) (520,000)
    Cost of Goods Sold 300,000 228,000
    Depreciation Expense 75,000 70,000
    Amortization Expense 25,000 - 15,000
    Income from O'Brien (210,000) - 210,000
    Net Income (935,000) (222,000)

    Retained Earnings, 1/1 (700,000) (250,000) 250,000


    Net Income (935,000) (222,000)
    Dividends Declared 142,000 80,000
    Retained Earnings, 12/ (1,493,000) (392,000)

    Cash 185,000 105,000


    Receivables 225,000 56,000
    Inventory 175,000 135,000
    Investment in O'Brien 680,000 - 80,000

    Trademarks 474,000 60,000 100,000


    Customers Relationships - - 75,000
    Equipment 925,000 272,000 3,000
    Goodwill - - 55,000
    Total Assets 2,664,000 628,000

    Liabilities (771,000) (136,000)


    Common Stock (400,000) (100,000) 100,000
    Retained Earnings, 12/31 (1,493,000) (392,000)
    Total Liabilities and Eq (2,664,000) (628,000) 888,000

    20 Investment in Abernethy 80,000


    Equity in Abernethy 80,000
    Amortizatio
    Fair value of allocations Life ns
    Land 10,000 - -
    Buildings 40,000 4 10,000
    Equipment (20,000) 5 (4,000)
    Total 30,000 6,000

    Cash paid 490,000


    Book value over assets received 400,000
    Fair value in excess of book value 90,000
    Total fair value of allocations 30,000
    Goodwill 60,000

    2014 Journal Entries


    S
    Common Stock 250,000
    APIC 50,000
    Retained Earnings 1/1 100,000
    Investment Abernethy 400,000

    A
    Land 10,000
    Building 40,000
    Goodwill 60,000
    Equipment 20,000
    Investment in Abernethy 90,000

    I
    Equity in Abernethy 74,000
    Investment in Abernethy 74,000

    D
    Investment in Abernethy 10,000
    Dividends Paid 10,000

    E
    Equipment 4,000
    Depreciation Expense 6,000
    Buildings 10,000

    2015 Journal Entries


    S
    Common Stock 250,000
    APIC 50,000
    Retained Earnings 1/1 170,000
    Investment in Abernethy 470,000

    A
    Land 10,000
    Building 30,000
    Goodwill 60,000
    Equipment 160,000
    Investment in Abernethy 840,000

    I
    Equity in Abernethy 104,000
    Investment in Abernethy 104,000

    D
    Investment in Abernethy 30,000
    Dividends Paid 30,000

    E
    Equipment 6,000
    Depreciation Expense 4,000
    Buildings 10,000

    21 Investment in Abernethy 80,000


    Equity in Abernethy 80,000
    Amortizatio
    Fair value of allocations Life ns
    Equipment 20,000 5 4,000
    Long-term Liabilities 30,000 4 7,500
    Total 50,000 11,500

    Cash paid 500,000


    Book value over assets received 400,000
    Fair value in excess of book value 100,000
    Total fair value of allocations 50,000
    Goodwill 50,000

    2014 Journal Entries


    S
    Common Stock 250,000
    APIC 50,000
    Retained Earnings 1/1 100,000
    Investment Abernethy 400,000

    A
    Equipment 20,000
    Long-term Liabilities 30,000
    Goodwill 50,000
    Investment in Abernethy 100,000

    D
    Dividend Income 10,000
    Dividend Paid 10,000

    E
    Interest Expense 7,500
    Depreciation Expense 4,000
    Long-term Liabilities 7,500
    Equipment 4,000

    2015 Journal Entries


    Investment in Abernethy 58,500
    Retained Earnings 58,500

    S
    Common Stock 250,000
    APIC 50,000
    Retained Earnings 1/1 170,000
    Investment in Abernethy 470,000

    A
    Equipment 16,000
    Long-term Liabilities 22,500
    Goodwill 50,000
    Investment in Abernethy 88,500

    I
    Dividend Income 30,000
    Dividend Paid 30,000

    E
    Interest Expense 7,500
    Depreciation Expense 4,000
    Long-term Liabilities 7,500
    Equipment 4,000

    22 Abernethy fair value 520,000


    Book value 420,000
    Excess fair value over book value 100,000
    Life assigned to goodwill -
    Annual excess amortizations -

    2014 Journal Entries


    S
    Common Stock 250,000
    APIC 50,000
    Retained Earnings 1/1 100,000
    Investment in Abernethy 400,000

    A
    Goodwill 120,000
    Investment in Abernethy 120,000

    I
    Equity in Abernethy 80,000
    Investment in Abernethy 80,000

    D
    Investment in Abernethy 10,000
    Dividend Paid 10,000

    2015 Journal Entries


    S
    Common Stock 250,000
    APIC 50,000
    Retained Earnings 1/1 170,000
    Investment in Abernethy 470,000

    A
    Goodwill 120,000
    Investment in Abernethy 120,000

    I
    Equity in Earnings of Sub 110,000
    Investment in Abernethy 110,000

    D
    Investment in Abernethy 30,000
    Dividends Paid 30,000
    Company
    et
    1, 2015

    onsolidation Entries
    Consolidate
    Credit d Totals
    (1,645,000)
    528,000
    3,000 142,000
    40,000
    -
    (935,000)

    (700,000)
    (935,000)
    80,000 142,000
    (1,493,000)

    290,000
    281,000
    310,000
    200,000
    350,000
    210,000 -
    634,000
    15,000 60,000
    30,000 1,170,000
    55,000
    2,800,000

    (907,000)
    (400,000)
    (1,493,000)
    888,000 (2,800,000)

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