myriamm Posts: 1, Reputation: 1 New Member   #1 Mar 18, 2011, 10:56 AM

i need to finish a consoidated balance sheet working papers and is being so hard Problem III Owl Corporation acquired 90% of the voting stock of Hunt Corporation on January 1, 2004 for $7,000 when Hunt had Capital Stock of $5,000 and Retained Earnings of $1,500. The excess of cost over book value was allocated $150 to inventories that were sold in 2004, $200 to undervalued land, $400 to undervalued equipment with a remaining useful life of 5 years under the straight-line method, and the remainder to goodwill. Financial statements for Owl and Hunt Corporations at the end of the fiscal year ended December 31, 2005 appear in the first two columns of the partially completed consolidation working papers. Owl has accounted for its investment in Hunt using the equity method of accounting. Owl Corporation owed Hunt Corporation $100 on open account at the end of the year. Dividends receivable in the amount of $450 payable from Hunt to Owl is included in Owl's net receivables. Required: Complete the consolidation working papers for Owl Corporation and Subsidiary. Owl Corporation and Subsidiary Consolidated Balance Sheet Working Papers at December 31, 2005 Owl Hunt Eliminations Non- Cntl Consol- idated Debit Credit INCOME STATEMENT Sales $ 10,000 $ 6,500 Income from Hunt 1,270 Cost of Sales ( 4,000) ( 3,300) Depreciation expense ( 1,000) ( 1,000) Other expenses ( 1,800) ( 700) Net income 4,470 1,500 Retained Earnings 1/1 2,510 2,000 Add: Net income 4,470 1,500 Less: Dividends ( 2,000) ( 1,000) Retained Earnings 12/31 $ 4,980 $ 2,500 BALANCE SHEET Cash 1,440 1,900 Receivables-net 1,550 600 Inventories 1,500 1,200 Land 1,000 600 Equipment and Buildings-net 7,500 5,700 Investment in Hunt Corporation 7,590 TOTAL ASSETS TOTAL ASSETS $ 20,580 2 $10,000 LIAB. & EQUITY Accounts payable 3,000 2,000 Dividends payable 1,000 500 Capital Stock 11,600 5,000 Retained Earnings 4,980 2,500 LIAB. & EQUITY $ 20,580 $10,000

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