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How much is consolidated buildings at december

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Davis acquires 100% of Ramos on January 1, 2009, Ramos will be operated as a separate subsidiary. Davis will use the equity method to account for its investment in Ramos. in 2013, Davis has net income of $400,000 and pays dividends of $100,000. Ramos has net income of $200,000 and pays dividends of $75,000. At acquisition date, Davis has a building with a book value of $3,000,000 and a fair value of $4,000,000. At that date, Ramos had a building with a book value of $800,000 and fair value of $900,000. Both buildings have a remaining useful life of 10 years (assume straight line depreciation).

  • At December 31, 2013 Davis had book value (BV) of Building of 5,000,000 and fair value (FV) of 6,000,000. Ramos had BV of Building of 2,000,000 and FV of 1,500,000.

Problem a. Prepare consolidation worksheet "D" to reflect the necessary adjustment for dividends

Problem b. How much are consolidated dividends for 2013

Problem c. Prepare worksheet entry "A" at December 31, 2013 (assume there is no goodwill)

Problem d. How much is consolidated buildings at December 31, 2013

Reference no: EM133000111

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