Solution-Prepare the consolidated financial statements

Prepare the consolidated financial statements

Assignment Help Financial Accounting

Reference no: EM13333393

Problem

Balance Sheets December 31, 20X3

	GreenTower Ltd.	BlueLoft Ltd.
Assets:
Current assets:
Cash	$ 156,000	$ 143,000
Accounts receivable	195,000	175,500
Inventory	312,000	253,500
Total current assets	663,000	572,000
Land	923,000	-
Equipment	897,000	1,183,000
Accumulated amortization	(663,000)	(416,000)
Investment in Blue Loft	1,409,200	-
Goodwill*	98,800	__-____
Total assets	3,328,000	1,339,000
Liabilities and shareholders' equity:
Liabilities:
Accounts payable	184,600	78,000
Bonds payable	780,000	260,000
Total liabilities	964,600	338,000
Shareholders' equity:
Common shares	650,000	325,000
Retained earnings	1,713,400	676,000
Total shareholders' equity	2,363,400	1,001,000
Total liabilities and shareholders' equity	$3,328,000	$1,339,000

*from an acquisition prior to Blue Loft

Income Statements

Year Ended December 31, 20X3

	GreenTower Ltd.	BlueLoft Ltd.
Sales revenue	$1,560,000	$1,283,100
Cost of goods sold	1,040,000	845,000
	520,000	438,100
Gain on sale of land	___-___	273,000
	520,000	711,100
Operating expense	305,500	464,100
Net income	214,500	247,000

Statements of Retained Earnings

Year Ended December 31, 20X3

	Green Tower Ltd.	BlueLoft Ltd.
Retained earnings, December 31, 20X2	$1,498,900	$ 429,000
Net income	214,500	247,000
Retained earnings, December 31, 20X3	$1,713,400	$ 676,000

Blue Loft Ltd.

Carrying and Fair Values

January 1, 20X2

	Carrying Value	Fair Value
Cash	$ 104,000	$ 104,000
Accounts receivable	128,700	128,700
Inventory	231,400	253,500
Land	650,000	811,000
Equipment	390,000	151,000
Accumulated amortization	(260,000)
Accounts payable	91,000	91,000
Bonds payable	260,000	260,000
Common shares	325,000	-
Retained earnings	568,100	-

On January 1, 20X2, Green Tower Ltd. acquired all the outstanding common shares of Blue Loft Ltd. for $1,409,200 cash.
At December 31, 20X2, Green Tower's inventory included goods that it had purchased from Blue Loft for $58,500. The intercompany profit on these goods was $15,600. All these goods were sold to third parties in 20X3.
During 20X3, Green Tower purchased goods from Blue Loft for $195,000. Blue Loft earned a gross profit of $65,000 on this sale. At December 31, 20X3, Green Tower still had 40% of these goods in its inventory.
During 20X3, Green Tower sold goods to Blue Loft for $507,000. Green Tower earned a gross profit of $117,000 on this sale. At December 31, 20X3, Blue Loft still had 20% of these goods in its inventory.
In December, 20X3, Blue Loft sold a tract of land to Green Tower for $923,000. Blue Loft had purchased the land 8 years ago for $650,000.
At the time of Green Tower's acquisition, Blue Loft's equipment had a remaining estimated useful life of 3 years. Blue Loft uses the straight-line method of amortization, with no residual value.

Required:

Prepare the consolidated financial statements for 20X3 using the direct method.

Reference no: EM13333393

Questions Cloud

Use technology and information resources to research issues : Use at least three (3) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources.

Calculate the total amount of dividends : Calculate the total amount of dividends declared by March for 20X7 and calculate March's profit for 20X8

Define the vapor pressure of a liquid at a given temperature : How is the vapor pressure of a liquid at a given temperature related to the strength of intermolecular forces

Compare the bus topology and the star topology : Describe the five IP addressing classes. Provide an example for each of classes in binary and dotted-decimal representation. Show the conversion of each of the addresses. Describe the function of the subnet address for each of the classes and how ..

Prepare the consolidated financial statements : Prepare the consolidated financial statements for 20X3 using the direct method - acquired all the outstanding common shares of Blue Loft Ltd. for $1,409,200 cash.

Compute the payback statistic for project b : Compute the payback statistic for Project B if the appropriate cost of capital is 10 percent and the maximum allowable payback period is three years.

If the severity of business cycles were reduced wha twould : If the severity of business cycles were reduced, what would be the effect on each of the four types of unemployment and on theunemployment rate as a whole? The four types of unemployment are frictional,structural, cyclical, and full unemployment.

Prepare swags consolidated balance sheet : Prepare Swag's consolidated balance sheet under each of the following independent situations - swag purchased the assets and assumed the liabilities of Perk by paying $1,400,000 in cash and issuing a $12,600,000 note.

Apply and consolidate skills acquired in the requirement : Develop a domain model for the car park system. Express your model with a class diagram, showing any inheritance and compositional relationships.

User Account

All Pages

Prepare the consolidated financial statements

Reference no: EM13333393

Reference no: EM13333393

Questions Cloud

Reviews

Write a Review

Financial Accounting Questions & Answers

Financial statement analysis and preparation

Shareholder of a company

Financial and accounting principles

Prepare a statement of cash flow using the direct method

Financial accounting assignment

Prepare general journal entries for goela

Principles of financial accounting

Prepare general journal entries to record the transactions

Global reporting initiative

Explain the iasb conceptual frameworks

Determine the company''s financial statements

Computation of free cash flow

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT