BUS FPX 4063 Assessment 2 Problem Templates

BUS FPX 4063 Assessment 2 Problem Templates

Student Name

Capella University

BUS-FPX4063 Advanced Financial Accounting Topics and Trends

Prof. Name:

Date

Problem 1: Determining Consolidated Balances

Acquisition Date and Fair Value Adjustments

On the acquisition date, the subsidiary’s fair value was determined to be $1,870,000, while its book value was $1,320,000, resulting in a fair value excess of $550,000. This excess was allocated to specific accounts as follows:

• Land: $363,000
• Buildings and Equipment: $(55,000) (negative adjustment)
• Copyright: $220,000
• Notes Payable: $22,000

The total allocations sum up to $550,000, aligning with the excess fair value.

Annual amortizations for these adjustments are as follows:

• Buildings and Equipment: $(5,500)
• Copyright: $11,000
• Notes Payable: $2,750
  The total annual excess amortization equals $19,250.

Consolidated Income Statement, Retained Earnings, and Balance Sheet

| Retained Earnings | | | |
| Beginning Balance | (2,783,000) + (968,000) | N/A | (3,751,000) |
| Net Income | (1,014,200) | N/A | (1,014,200) |
| Dividends Paid | 572,000 | N/A | 572,000 |
| Ending Balance | (3,225,200) | N/A | (3,225,200) |

| Balance Sheet | | | |
| Current Assets | 2,123,000 + 1,161,000 | N/A | 3,284,000 |
| Land | 642,400 + 132,000 + 363,000 | N/A | 1,137,400 |
| Buildings & Equipment | 1,929,400 + 583,000 – 55,000 | (5,500) | 2,462,900 |
| Copyright | 0 + 209,000 + 220,000 | (11,000) | 418,000 |
| Total Assets | 6,307,400 + 2,085,600 | N/A | 7,302,900 |

Additional Consolidation Details

1. Cost of Goods Sold: Adjusted consolidated cost of goods sold was calculated as $983,560, considering unrealized profits of $87,840.
2. Inventory: Consolidated inventory was adjusted to $969,600, reflecting unrealized profits of $33,600
3. Noncontrolling Interest (NCI): NCI’s share in net income amounted to $25,520 (20% of $127,600).

BUS FPX 4063 Assessment 2 Problem Templates

References

American Psychological Association. (2020). Publication manual of the American Psychological Association (7th ed.). Washington, DC: APA.
Relevant data retrieved from CourseHero, 2024.