My writer delivered an awesome dissertation on the Creek War, I definitely didn’t have the time to do all the research she did on my own.
Essay (any type)
09/08/2022
Powder Company spent $240,000 to acquire all of Sawmill Corporation’s stock on January 1, 20X2….
Powder Company spent $240,000 to acquire all of Sawmill Corporation’s stock on January 1, 20X2. On December 31, 20X4, the trial balances of the two companies were as follows:
Powder Company Sawmill Corporation
Item Debit Credit Debit Credit
Cash $ 74,000 $ 42,000
Accounts Receivable 130,000 53,000
Land 60,000 50,000
Buildings & Equipment 500,000 350,000
Investment in Sawmill Corporation 268,000
Cost of Services Provided 470,000 130,000
Depreciation Expense 35,000 18,000
Other Expenses 57,000 60,000
Dividends Declared 30,000 12,000
Accumulated Depreciation $ 265,000 $ 93,000
Accounts Payable 71,000 17,000
Taxes Payable 58,000 60,000
Notes Payable 100,000 85,000
Common Stock 200,000 100,000
Retained Earnings 292,000 120,000
Service Revenue 610,000 240,000
Income from Sawmill Corporation 28,000
$ 1,624,000 $ 1,624,000 $ 715,000 $ 715,000
Sawmill Corporation reported retained earnings of $100,000 at the date of acquisition. The difference between the acquisition price and underlying book value is assigned to buildings and equipment with a remaining economic life of 10 years from the date of acquisition. Sawmill’s accumulated depreciation on the acquisition date was $25,000. At December 31, 20X4, Sawmill owed Powder $2,500.
Required:
a. Prepare the following journal entries recorded by Powder with regard to its investment in Sawmill during 20X4.
b. Prepare all consolidation entries required on December 31, 20X4, to prepare consolidated financial statements.
c. Prepare a three-part consolidation worksheet as of December 31, 20X4.
