Pecos Company acquired 100% of Suaro's outstanding stock for$1,450,000 cash on January 1, 2014, when Suara had the followingbalance sheet: Assets: Cash: $37,000 Receivables: $82,000Inventory: $149,000 Land: $90,000 Equipment: $225,000 Software:$315,000 Liabilities: $(422,000) Common Stock: $(350,000) RetainedEarnings: $(126,000) At the acquisition date, the fair value ofeach identifiable asset and liability that differed from book valuewere as follows: Land: $80,000 Brand Name: $60,000 Software:$415,000 (indefinite life-unrecognized on Suaro's books) In ProcessR&D: $300,000 (2-year estimated remaining useful life)Additional Info: -Although at acquisition date Pecos expectedfuture benefits from Suaro's in Process R&D by the end of 2014it became clear that the research project was a falure with notfuture benefit -During 2014, Suaro earns $75,000 and pays nodividends -Selected amounts from Pecos and Suaro's separatefinancial statements at 12/31/15 are presented in teh consolidatedinformation worksheet. All consolidated worksheets are to beprepared as of 12/31/15, two years subsequent to acquisition.-Pecos's January 1, 2015 Retained Earnings balance-before anyeffect from Suar's 2014 income is ($930,000) (Credit balance)-Pecos has $500,000 common shares outstanding for EPS calculationsand reported $2,943,100 for consolidated assets at the beginning ofperiod. *I have the consolidated worksheet and am supposed toprepare trial balances for Equity method, initial value and partialequity. I have done this and done it right. The second part is whati need help with. 2. Using references to other cells only (eitherfrom the consolidated information sheet or from the sep methodsheet) prepare for each of the three consolidation worksheets:Adjustments and Eliminations and Consolidated balances.
12/31/15 Trial Balances Pecos Suaro Revenues ($1,052,000) ($427,000) Operating Expenses $821,000 $262,000 Goodwill Impairment Loss ? Income of Suaro ?
Net Income ? ($165,000) Retained Earnings-Pecos 1/1/15 ? Retained Earnings-Suaro 1/1/15 ($201,000) Net Income (above) ? ($165,000) Dividends Declared $200,000 $35,000 Retained Earnings 12/31/15 ? ($331,000) Cash $195,000 $95,000 Receivables $247,000 $143,000 Inventory $415,000 $197,000 Investment in Suearo ? Land $341,000 $85,000 Equipment (net) $240,100 $100,000 Software $312,000 Other Intangibles $145,000 Goodwill Total Assets ? $932,000 Liabilities ($1,537,100) ($251,000) Common Stock ($500,000) ($350,000) Retained Earnings (above) ? ($331,000) Total Liabilities and equity ? ($932,000) Fair Value allocation schedule Price Paid $1,450,000 Book Value $476,000 Excess Initial Value $974000 Amortizations to land ($10,000) 2014 2015 to brand name $60,000 ? ? to software $100,000 ? ? to IPR&D $300,000 ? ? to goodwill $524,000 ? ? Suaro's RE Changes Income Dividends 2014 $75,000 0 2015 $165,000 $35,000
Pecos Company acquired 100% of Suaro's outstanding stock for$1,450,000 cash on January 1, 2014, when Suara had the followingbalance sheet: Assets: Cash: $37,000 Receivables: $82,000Inventory: $149,000 Land: $90,000 Equipment: $225,000 Software:$315,000 Liabilities: $(422,000) Common Stock: $(350,000) RetainedEarnings: $(126,000) At the acquisition date, the fair value ofeach identifiable asset and liability that differed from book valuewere as follows: Land: $80,000 Brand Name: $60,000 Software:$415,000 (indefinite life-unrecognized on Suaro's books) In ProcessR&D: $300,000 (2-year estimated remaining useful life)Additional Info: -Although at acquisition date Pecos expectedfuture benefits from Suaro's in Process R&D by the end of 2014it became clear that the research project was a falure with notfuture benefit -During 2014, Suaro earns $75,000 and pays nodividends -Selected amounts from Pecos and Suaro's separatefinancial statements at 12/31/15 are presented in teh consolidatedinformation worksheet. All consolidated worksheets are to beprepared as of 12/31/15, two years subsequent to acquisition.-Pecos's January 1, 2015 Retained Earnings balance-before anyeffect from Suar's 2014 income is ($930,000) (Credit balance)-Pecos has $500,000 common shares outstanding for EPS calculationsand reported $2,943,100 for consolidated assets at the beginning ofperiod. *I have the consolidated worksheet and am supposed toprepare trial balances for Equity method, initial value and partialequity. I have done this and done it right. The second part is whati need help with. 2. Using references to other cells only (eitherfrom the consolidated information sheet or from the sep methodsheet) prepare for each of the three consolidation worksheets:Adjustments and Eliminations and Consolidated balances.
| 12/31/15 Trial Balances | |||
| Pecos | Suaro | ||
| Revenues | ($1,052,000) | ($427,000) | |
| Operating Expenses | $821,000 | $262,000 | |
| Goodwill Impairment Loss | ? | ||
| Income of Suaro | ? | ||
| Net Income | ? | ($165,000) | |
| Retained Earnings-Pecos 1/1/15 | ? | ||
| Retained Earnings-Suaro 1/1/15 | ($201,000) | ||
| Net Income (above) | ? | ($165,000) | |
| Dividends Declared | $200,000 | $35,000 | |
| Retained Earnings 12/31/15 | ? | ($331,000) | |
| Cash | $195,000 | $95,000 | |
| Receivables | $247,000 | $143,000 | |
| Inventory | $415,000 | $197,000 | |
| Investment in Suearo | ? | ||
| Land | $341,000 | $85,000 | |
| Equipment (net) | $240,100 | $100,000 | |
| Software | $312,000 | ||
| Other Intangibles | $145,000 | ||
| Goodwill | |||
| Total Assets | ? | $932,000 | |
| Liabilities | ($1,537,100) | ($251,000) | |
| Common Stock | ($500,000) | ($350,000) | |
| Retained Earnings (above) | ? | ($331,000) | |
| Total Liabilities and equity | ? | ($932,000) | |
| Fair Value allocation schedule | |||
| Price Paid | $1,450,000 | ||
| Book Value | $476,000 | ||
| Excess Initial Value | $974000 | Amortizations | |
| to land | ($10,000) | 2014 | 2015 |
| to brand name | $60,000 | ? | ? |
| to software | $100,000 | ? | ? |
| to IPR&D | $300,000 | ? | ? |
| to goodwill | $524,000 | ? | ? |
| Suaro's RE Changes | Income | Dividends | |
| 2014 | $75,000 | 0 | |
| 2015 | $165,000 | $35,000 | |
