Reference no: EM131434599 , Length: word count:1000

You are a manger in the accounting department of Greene Company. Greene is a rapidly expanding manufacturing company, and is considering some additional acquisitions. The company would like to diversify, and is trying to decide between the two different scenarios outlined in Part 1 and Part 3. To help him make his decision, the Chief Financial Officer would like specific information on how the potential acquisitions would affect financial reporting.

PROJECT REQUIREMENTS:

This project is split into four (4) parts with one (1) part due each week of the course. Based on your readings, use of technology, research of literature, and other sources do the following:

Part 1 - Greene is considering diversifying by purchasing an insurance company and a lumber company. The CFO would like to know how the accounts of these two substantially different subsidiaries would be reported in the consolidated financial statements. Research the Accounting Standards Codification to see what guidance is provided, and prepare a 2 page memo to the CFO with your findings. Include in your memo at least two examples of situations in which it may be inappropriate to combine similar-appearing accounts of two subsidiaries.

Part 2 - View the attached excel file to prepare a consolidated balance sheet for Greene.

Part 3 -In a separate scenario, Greene is investigating purchasing two overseas manufacturing companies that would be included in Greene's consolidated financial statements as wholly owned subsidiaries. One company is located in New Zealand, and the other company is located in Spain. The CFO would like to know what factors need to be considered when determining the functional currency for a consolidated subsidiary. Research the Accounting Standards Codification to see what guidance is provided, and prepare a 2 page memo to the CFO explaining the various economic indicators to be considered both individually and collectively.

Part 4 - Present your project to the class for discussion.

Preparation of Consolidated Balance Sheet -

Greene Company purchased 60 percent of White Corporation's voting shares on June 3, 2012, at book value. At that date, the fair value of the non-controlling interest was equal to 40 percent of the book value of White Corporation. The companies' permanent accounts on December 31, 2017, contained the following balances:

	Greene Company	White Corporation
Cash and Receivables	$101,000	$20,000
Inventory	80,000	40,000
Land	150,000	90,000
Buildings & Equipment	400,000	300,000
Investment in White Corporation Stock	141,000	________
	$872,000	$450,000
Accumulated Depreciation	$135,000	$85,000
Accounts Payable	90,000	25,000
Notes Payable	200,000	90,000
Common Stock	100,000	200,000
Retained Earnings	347,000	50,000
	$872,000	$450,000

On January 1, 2013, Greene paid $100,000 for equipment with a 10-year expected total economic life.

 The equipment was depreciated on a straight-line basis with no residual value.

White purchased the equipment from Greene on December 31, 2015, for $91,000. Assume White did not change the remaining estimated useful life of the equipment.

White sold land it had purchased for $30,000 on February 23, 2015, to Greene for $20,000 on October 14, 2016. Assume Greene uses the fully adjusted equity method.

Required

1. Prepare a consolidated balance sheet worksheet in good form as of December 31, 2017.

2. Prepare a consolidated balance sheet as of December 31, 2017.

Attachment:- Assignment.rar