Reference no: EM131148555

Advanced Financial Accounting

Answer the following questions completely, showing all work.

On Jan 1, 2011, Peter Piper's Corp purchased an 80% interest in the common stock of Suzy Q for $350,000.00 Sunflower had the following Balance Sheet on the date of acquisition:

Suzy Q's Corporation
Balance Sheet
Jan 1, 2011

Assets:                                                                  Liabilities & Equity

Accounts Receivable        $40,000                        Accounts Payable       $42,297

Inventory                         20,000                          Bonds Payable          $100,000

Land                                 35,000                          Discount on BP           (2,297)

Buildings                           250,000                        Common Stk ($10 par) $10,000

Accumulated Depreciation (50,000)                       Paid in Capital       $90,000

Equipment                         $120,000                     Retained Earnings       $115,000.

Accumulated Depreciation (60,000)                      Total                          $355,000

Total                                  $355,000

A comparison of the FMV determined the following:

Inventory                   $25,000

Buildings                    $180,000 10 year life

Equipment                  $95,000 5 year life

Patent                         $25,000 10 year life

Bonds Payable            $110,000 5 year life

Petunia and Sunflower had the following Trial Balances on Dec 31, 2013

	Petunia	Sunflower
Cash	$71,070	$32,032
Accounts Receivable	90,000	60,000
Inventory	100,000	30,000
Land	150,000	45,000
Investment in Sub	385,738	0
Computers	100,775	0
Buildings	500,000	250,000
Accumulated Depreciation	($300,000)	($70,000)
Equipment	200,000	120,000
Accumulated Depreciation	(100,000)	(84,000)
Accounts Payable	(55,000)	(25,000)
Bonds Payable	0	(100,000)
Discount on Bonds Payable	0	1,640
Common Stock	(100,000)	(10,000)
Paid-in Capital	(600,000)	(90,000)
Retained Earnings	(400,000)	(145,000)
Sales	(600,000)	(220,000)
Cost of Goods Sold	410,000	120,000
Depreciation Expense-Buildings	30,000	10,000
Depreciation Expense-Equipment	15,000	12,000
Other Expenses	110,000	45,000
Interest Revenue	(7,845)	0
Interest Expense	0	8,328
Subsidiary Income	(19,738)	0
Dividends Declared	20,000	10,000
Total	-0-	-o-

Prepare the worksheet necessary to produce the Consolidated Financial Statements for Petunia and Sunflower for the year ended Dec 31, 2013. Include the Determination and Distribution of Excess Schedule.

Notes for assignment

Prepare the worksheet necessary to produce the Consolidated Financial Statements for Petunia and Sunflower for the year ended Dec 31, 2013. Include the Determination and

1. Distribution of Excess Schedule.

2. Show all work and journal entries as to how you got the numbers on worksheet in accordance to generally accepted accounting principles (GAAP)

3. Remember to also fill out the Determination & Distribution of Excess Schedule. (Again show how all work was done & in accordance to generally accepted accounting principles (GAAP))

4. Eliminations and Adjustments: (where applicable) (show all work)
- Current year subsidiary income
- Current year dividend
- Eliminate controlling interest in subsidiary equity
- Distribute excess and NCI adjustment
- Amortize excess-building, equipment, Patent and Bonds Payable
- Eliminate intercompany sale during current period
- Eliminate intercompany unpaid trade account
- Defer beginning inventory profit
- Defer ending inventory profit
- Eliminate intercompany bonds