Reference no: EM133586

Question :

Problem 3 At the of 2013, big and Little had the subsequent income statements and balance sheets:

                                                   Big                    Little

Sales                                     2,000,000          400,000

Cogs                                     1,000,000          200,000

Gross profit                            1,000,000         200,000

Depreciation exp                    400,000            40,000

Investment income                    a                        0

Net income                                b                   160,000

                                               BIG             LITTLE

CASH                                  3,000,000        250,000

INVENTORY                         3,000,000         200,000

LAND                                  4,000,000         1,000,000

EQUIPMENT                         3,000,000          300,000

a/d equip                             1,400,000         140,000

net equipment                      1,600,000          160,000

Investment in Little                       c                    0

TOTAL ASSETS                            d               1,610,000

ACCOUNTS PAYABLE             2,000,000           200,000

BOND PAYABLE                     2,000,000           100,000

TOTAL LIABILITIES               4,000,000            300,000

COMMON STOCK                  7,000,000            700,000

RETAINED EARNINGS                   e                 610,000

Required:

a)  Fill in the values for a, b, c, d, and e ...you will use any of the 3 methods, full equity, initial value or partial equity but let me know which you are using.

b)  Purpose the journal entries that Big made through the year because of its investment in Little, you must use the same technique as you did in part a

c)  Purpose the consolidated worksheet entries

d)  Purpose the consolidated income statement

e)  Purpose the consolidated balance sheet