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rnational purchased 70% of the outstanding common stock of Landon Chemical on December 31, 2021. Burch paid $140,000 for the shares and determined that the fair value of all recorded Landon assets and liabilities approximated their book values, with the exception of a customer list that was not recorded and had a fair value of $10,000, and an expected remaining useful life of 5 years. At the time of purchase, Landon had a stockholders’ equity consisting of capital stock amounting to goodwill. The separate financial statements at December 31, 2022. appear in the first two columns of the consolidation worksheet shown below. a. Complete the Income Statement b. Using the information provided, do a Balance Sheet. c. Provide the appropriate journal entries for the investor d. Provide the appropriate elimination entries.

rnational purchased 70% of the outstanding common stock of Landon Chemical on December 31, 2021. Burch paid $140,000 for the shares and determined that the fair value of all recorded Landon assets and liabilities approximated their book values, with the exception of a customer list that was not recorded and had a fair value of $10,000, and an expected remaining useful life of 5 years. At the time of purchase, Landon had a stockholders’ equity consisting of capital stock amounting to goodwill. The separate financial statements at December 31, 2022. appear in the first two columns of the consolidation worksheet shown below. a. Complete the Income Statement b. Using the information provided, do a Balance Sheet. c. Provide the appropriate journal entries for the investor d. Provide the appropriate elimination entries.

FINANCIAL ACCOUNTING
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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1. Burch International purchased 70% of the outstanding common stock of Landon Chemical on December 31, 2021. Burch paid $140,000 for the shares and determined that the fair value of all recorded Landon assets and liabilities approximated their book values, with the exception of a customer list that was not recorded and had a fair value of $10,000, and an expected remaining useful life of 5 years. At the time of purchase, Landon had a stockholders’ equity consisting of capital stock amounting to goodwill. The separate financial statements at December 31, 2022. appear in the first two columns of the consolidation worksheet shown below.

a. Complete the Income Statement

b. Using the information provided, do a Balance Sheet.

c. Provide the appropriate journal entries for the investor

d. Provide the appropriate elimination entries.

INCOME STATEMENT Sales Income of Landon Cost of Sales Other expenses Noncontrolling interest share Net Income Retained Earn Jan 1 Net income Dividends Retained Earn Dec 31 BALANCE SHEET ASSETS: Burch Customer List Goodwill Landon 331,900 48,000 9,100 (148,000) (25,000) (72,000) (8,000) Cash Accounts Rec net Inventories Land 80,000 Equipment and Building 469,000 Investment in Landon 146,300 121,000 15,000 846,000 80,000 121,000 15,000 (9,000) (4,000) 958,000 91,000 135,000 64,000 227,000 160,000 316,000 86,000 40,000 230,000 Total Assets Liability and Equity: Accounts Payable Capital Stock Retained Earnings Non Control Interest Total Liability & Equity 1,373,300| 580,000 1,373,300 580,000 305,300 469,000 110,000 20,000 958,000 91,000 Elimination Entries Credit Debit Consolidated Totals
Transcribed Image Text:INCOME STATEMENT Sales Income of Landon Cost of Sales Other expenses Noncontrolling interest share Net Income Retained Earn Jan 1 Net income Dividends Retained Earn Dec 31 BALANCE SHEET ASSETS: Burch Customer List Goodwill Landon 331,900 48,000 9,100 (148,000) (25,000) (72,000) (8,000) Cash Accounts Rec net Inventories Land 80,000 Equipment and Building 469,000 Investment in Landon 146,300 121,000 15,000 846,000 80,000 121,000 15,000 (9,000) (4,000) 958,000 91,000 135,000 64,000 227,000 160,000 316,000 86,000 40,000 230,000 Total Assets Liability and Equity: Accounts Payable Capital Stock Retained Earnings Non Control Interest Total Liability & Equity 1,373,300| 580,000 1,373,300 580,000 305,300 469,000 110,000 20,000 958,000 91,000 Elimination Entries Credit Debit Consolidated Totals
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