Prepare the journal entry for autumn corporation

Reference no: EM131268670

Autumn Corporation purchased 80% of the stock in Fall Corporation on January 1, 2015, for $360,000. On that date, the fair value of the non-controlling interest was $90,000. The book value and fair value information for Fall Corporation on 1/1/15 is as follows:

	Book Value	Fair Value
Cash	12,000	12,000
Accounts Receivable	30,000	30,000
Inventory	70,000	75,000
Land	50,000	65,000
PP&E	470,000	300,000
Accum. Depreciation	(235,000)
Accounts Payable	32,000	32,000
Common Stock	200,000
Retained Earnings	165,000
	460,000

Additional Information:

Fall Corporation uses the FIFO inventory method.

PP&E had a remaining economic life of 10 years.

Fall Corporation reported the following year-end information in 2015:

Net Income	50,000
Dividends	15,000

Fall Corporation reported the following year-end information in 2016:

Net Income	80,000
Dividends	20,000

1) Prepare the journal entry for Autumn Corporation on 1/1/2015:

2) Prepare the journal entries for Autumn Corporation 12/31/2015:

3) Prepare the journal entries for Autumn Corporation 12/31/2016:

4) Prepare a conolidation worksheet for Autumn and Fall Corporations as of 12/31/2016 using the following information:

	Autumn		Fall
Income Statement		Income Statement
Sales	750,000	Sales	150,000
Less: COGS	(425,000)	Less: COGS	(46,500)
Less: Depr. Expense	(45,000)	Less: Depr. Expense	(23,500)
Income from Fall Corp	58,800
Net Income	338,800	Net Income	80,000

Statement of RE		Statement of RE
Beg. RE	450,000	Beg. RE	200,000
Add: Net Income	338,800	Add: Net Income	80,000
Less: Dividends	(100,000)	Less: Dividends	(20,000)
End RE	688,800	End RE	260,000

Balance Sheet		Balance Sheet
Cash	350,000	Cash	100,000
Accounts Rec.	145,000	Accounts Rec.	72,000
Inventory	164,200	Inventory	65,000
Investment in Fall Corp	421,600
PP&E	400,000	PP&E	470,000
Less: Accum. Depr	(250,000)	Less: Accum. Depr	(282,000)
Land	100,000	Land	50,000
Total Assets	1,330,800	Total Assets	475,000

Accounts Payable	242,000	Accounts Payable	15,000
Common Stock	400,000	Common Stock	200,000
Retained Earnings	688,800	Retained Earnings	260,000
Total Liab. & Equity	1,330,800	Total Liab. & Equity	475,000

Reference no: EM131268670

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