Sheet1

Problem 5-1
Common Information
Ownership Interest

Number of Market Price

Cash Shares per Share
Price Paid

Company
Implied Fair
Value Analysis Value Parent Price NCI Value
Price Paid
Fair Value of Net Assets Excluding
Goodwill
Goodwill
Gain on Acquisition

Determination and Distribution of

Excess Schedule
Company
Value Parent Price NCI
Fair Value of Subsidiary
Less Book Value of Interest Acquired
Common Stock
Paid in Excess
Retained Earnings
Total Equity
Interest Acquired
Book Value
Excess of Cost over Book Value
Worksheet
Accounts Adjusted Distribution

Total 0

Cost to Equity Conversion

Subsidiary RE on Worksheet
Subsidiary RE on Purchase Date
Increase (Decrease)
Ownership Interest %
Adjustment to Investment Account

Income distribution schedules:

Subsidiary: DR CR
Internally generated net income

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Total
NCI share
Controlling share

Parent
Internally generated net income
Controlling share of subsidiary

Total

Consolidated Worksheet
Jayco Dreger Eliminations
Dr

Cash 72,500 67,500

Accounts Receivable 450,000 75,000
Inventory 200,000 65,000

Investment in bonds 46,500

Plant and Equipment (net) 2,420,000 196,000
Investment in Dreger 350,000

Accounts Payable (275,000) (18,000)

Bonds payable (50,000) 50,000

Common stock ($10 par) Jayco (1,000,000)

Paid in capital in rxcess of par Jayco (750,000)

Retained earnings Jayco (730,000)

Common stock ($10 par) Dreger (100,000)

Paid in capital in excess of par Dreger (130,000)

Retained earnings Dreger (80,000)

Sales (2,500,000) (540,000)

Cost of goods sold 1,000,000 405,000
Other expenses 720,000 106,000
Interest income (4,000) 4,000
Interest expense 3,500
Gain on debt

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0 0 54,000
Consolidated net income
NCI share
Controlling share
NCI
Controlling retained earnings
Totals

Eliminations and Adjustments:

Date Account Title Ref Debit

Bonds payable $50,000
Total interest income $4,000
Investment in bonds
Interest expense
Gain on debt
(Record elimination of the inter-company debt)

Problem 5-1
Common Information

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Total
0

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Eliminations Consol NCI Control. Consol.

Cr Net Inc. R.E. Bal. Sht.

140000
525,000
265,000

46,500 0
2,616,000
350,000

(293,000) Amortization value per ye

0

(1,000,000)
(750,000)

Total interest incom

(730,000)

(100,000)
(130,000)

Investment in bon
(80,000)

(3,040,000)
1,405,000
826,000
0
3,500 0
4,000 (4,000)

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54,000
(809,000)
4,000 4,000
(813,000) (813,000)
0 0
(1,543,000) (1,543,000)
0

Credit

$46,500
$3,500
$4,000
)

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Dreger Corp bonds face

Interest income=
valueXPercentage of issued 7%bonds
= 50,000X7%
= 3500
Dreger Corp issued bonds face value-
Discount value=
Bonds purchased by Jayco
= 50,000-46,000
= 4000

Amortization value per year= Discount/years

= 4000/8

= 500

Interest income+Amortization value per

Total interest income=
year
= 3500+500
= 4000

Bonds purchased by Jayco+Amortization

Investment in bonds=
value per year
= 46000+500
= 46500

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