Allison Corporation acquired 90 percent of Bretton on January 1, 2019. Of Bretton's total acquisition-date fair value, $60,000 was allocated to undervalued equipment (with a 10-year remaining life) and $80,000 was attributed to franchises (to be written off over a 20-year period). Since the takeover, Bretton has transferred inventory to its parent as follows: Transfer Price Year Cost 2019 $45,000 $90,000 $ 2020 48,000 80,000 2021 69,000 92,000 Remaining at Year-End 30,000 (at transfer price) 35,000 (at transfer price) 50,000 (at transfer price) On January 1, 2020, Allison sold Bretton a building for $50,000 that had originally cost $70,000 but had only a $30,000 book value at the date of transfer. The building is estimated to have a five-year remaining life (straight-line depreciation is used with no salvage value). Selected figures from the December 31, 2021, trial balances of these two companies are as follows: Sales Cost of goods sold Operating expenses Investment income Inventory Equipment (net) Buildings (net) Allison $ 700,000 440,000 120,000 Not given 210,000 140,000 350,000 Bretton $ 400,000 220,000 80,000 0 90,000 110,000 190,000 Determine consolidated totals for each of these account balances.

Allison Corporation acquired 90 percent of Bretton on January 1, 2019. Of Bretton's total acquisition-date fair value, $60,000 was allocated to undervalued equipment (with a 10-year remaining life) and $80,000 was attributed to franchises (to be written off over a 20-year period). Since the takeover, Bretton has transferred inventory to its parent as follows: Transfer Price Year Cost 2019 $45,000 $90,000 $ 2020 48,000 80,000 2021 69,000 92,000 Remaining at Year-End 30,000 (at transfer price) 35,000 (at transfer price) 50,000 (at transfer price) On January 1, 2020, Allison sold Bretton a building for $50,000 that had originally cost $70,000 but had only a $30,000 book value at the date of transfer. The building is estimated to have a five-year remaining life (straight-line depreciation is used with no salvage value). Selected figures from the December 31, 2021, trial balances of these two companies are as follows: Sales Cost of goods sold Operating expenses Investment income Inventory Equipment (net) Buildings (net) Allison $ 700,000 440,000 120,000 Not given 210,000 140,000 350,000 Bretton $ 400,000 220,000 80,000 0 90,000 110,000 190,000 Determine consolidated totals for each of these account balances.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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