Preparation of consolidated financial statements using the PDF

1 juil. 2016 Required. Prepare the consolidation worksheet entries for the preparation by Zack Ltd of its consolidated financial statements at 30 June 2016.

Teaching Consolidations Accounting: An Approach To Easing The

mechanics of preparing the consolidation worksheet entries. Keywords: consolidations equity method. INTRODUCTION eaching consolidations accounting is a

Preparation of consolidated financial statements using the

The consolidation worksheet entries for 30 June 2015 would be as follows: (1) Revaluation of plant to fair value. Accumulated depreciation(1).

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Consolidated worksheet adjusting entries. Eliminating parent's investment against equity acquired in subsidiary. • Dr Subsidiary's total equity balance at

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Instructions for completing DA Form 759-2 consolidated worksheet (rated Aircraft and flight simulator entries logged by seat designation (DA Form ...

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2 sept. 2015 internally generated goodwill. Worksheet entries at acquisition date -. Business combination valuation entries. Worksheet entries at acquisition ...

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The GASB 34 conversion worksheets can be found by going to the Reports menu at entries are extracted automatically to the Fund Consolidation worksheet.

Question 21.4 Full goodwill method multiple years

1 juil. 2016 Required. Prepare the consolidation worksheet entries for the preparation of consolidated financial statements of Huntsman Ltd for each of the ...

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Give all consolidating entries required on December 31 20X8

Preparation of consolidated financial statements using the worksheet method Visit KnowledgEquity.com.au for practice questions, videos, case studies and support for your CPA studies

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Solution

(a)

Book value of net assets of Entity B 350 000(1)

Add: Increase in equipment to fair value 40 000(2)

Less: Deferred tax liability -

revaluation of equipment (12 000)(3)

Fair value of net assets of Entity B 378 000

(1) The book value of the net assets of Entity B is derived from the book value of its equity (issued

capital + retained earnings) at acquisition ($250 000 + $100 000)

(2) The increase in the equipment to fair value is calculated as fair value less book value ($120 000 -

$80 000) (3) Calculated as 30 per cent of the increase in equipment to fair value ($40 000 * .30) (b) The goodwill on consolidation would be calculated as follows:

Consideration transferred 500 000

Less: Fair value of identifiable net assets(1) 378 000

Goodwill 122 000

(1)Calculated in part (a) above. Preparation of consolidated financial statements using the worksheet method Visit KnowledgEquity.com.au for practice questions, videos, case studies and support for your CPA studies

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Accumulated depreciation(1) 20 000

Equipment(2) 20 000

Business combinations reserve 28 000

Deferred tax liability(3) 12 000

(1) Accumulated depreciation adjustment / consolidation entry is reversing the accumulated depreciation previously recognised by Entity B. (2) The increase in equipment on revaluation is calculated as the net increase in the value of the equipment ($40 000 [being $120 000 fair value less $80 000 book value] less $20 000 [reversal of accumulated depreciation] = $20 000). (3) Deferred tax liability is calculated as 30 per cent of the increase in value of the equipment ($40 000 * 30%). (2) Depreciation entry and associated tax effect

Depreciation expense 8000

Accumulated depreciation 8000

(Calculated as difference in carrying value between Entity A and Entity B for the equipment divided by 5 years [the useful life of the equipment] $40 000 / 5 = $8000).

Deferred tax liability 2400

Income tax expense 2400

(Calculated as 30 per cent of the depreciation expense adjustment above) (3) Pre-acquisition elimination entry:

Issued capital 250 000

Retained earnings 100 000

Business combination reserve 28 000

Goodwill 122 000

Investment in Entity B 500 000

Preparation of consolidated financial statements using the worksheet method Visit KnowledgEquity.com.au for practice questions, videos, case studies and support for your CPA studies

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The following worksheet illustrates the pre-acquisition elimination entries required. Account Entity A Ltd Entity B Ltd Adjustments Consolidated financial statements DR CR

Statement of financial performance

Depreciation

expense

8000 8000

Income tax

expense

2400 2400

Statement of financial position

Issued capital 400 000 250 000 250 000 400 000

Retained

earnings

200 000 100 000 100 000 200 000

600 000 350 000 600 000

Equipment - 100 000 20 000 120 000

Accumulated

depreciation (20 000) 20 000 8000 (8000)

Other net

assets

100 000 270 000 370 000

Investment in

Entity B

500 000 500 000(3) -

Goodwill 122 000 122 000

Deferred tax

liability

2400 12 000 (9600)

Business

combinations reserve

28 000 28 000 -

600 000 350 000 550 400 550 400

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[PDF] Preparation of consolidated financial statements using the

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Solution

Book value of net assets of Entity B 350 000(1)

Less: Deferred tax liability -

Fair value of net assets of Entity B 378 000

Consideration transferred 500 000

Goodwill 122 000

© KNOWLEDGEQUITY® 2015

Accumulated depreciation(1) 20 000

Equipment(2) 20 000

Business combinations reserve 28 000

Deferred tax liability(3) 12 000

Depreciation expense 8000

Accumulated depreciation 8000

Deferred tax liability 2400

Income tax expense 2400

Issued capital 250 000

Retained earnings 100 000

Business combination reserve 28 000

Goodwill 122 000

Investment in Entity B 500 000

© KNOWLEDGEQUITY® 2015

Statement of financial performance

Depreciation

8000 8000

Income tax

2400 2400

Statement of financial position

Issued capital 400 000 250 000 250 000 400 000

Retained

200 000 100 000 100 000 200 000

600 000 350 000 600 000

Equipment - 100 000 20 000 120 000

Accumulated

Other net

100 000 270 000 370 000

Investment in

Entity B

500 000 500 000(3) -

Goodwill 122 000 122 000

Deferred tax

2400 12 000 (9600)

Business

28 000 28 000 -

600 000 350 000 550 400 550 400