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    Acquisition Analysis Cost Method: Operating Income - Excluding Dividend Income

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    Nicolyn Rae Escalante
    1. The document appears to be an analysis of the acquisition of a subsidiary by a parent company on multiple dates, showing the allocation of costs to assets and goodwill. 2. It includes income statements of the parent and subsidiary separately and consolidated for multiple years post-acquisition. 3. Eliminating entries are shown to account for the investment in the subsidiary on the parent's books at acquisition dates.

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    Acquisition Analysis Cost Method: Operating Income - Excluding Dividend Income

    Uploaded by

    Nicolyn Rae Escalante
    6 views7 pages
    1. The document appears to be an analysis of the acquisition of a subsidiary by a parent company on multiple dates, showing the allocation of costs to assets and goodwill. 2. It includes income statements of the parent and subsidiary separately and consolidated for multiple years post-acquisition. 3. Eliminating entries are shown to account for the investment in the subsidiary on the parent's books at acquisition dates.

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    Asset

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    1. The document appears to be an analysis of the acquisition of a subsidiary by a parent company on multiple dates, showing the allocation of costs to assets and goodwill. 2. It includes income statements of the parent and subsidiary separately and consolidated for multiple years post-acquisition. 3. Eliminating entries are shown to account for the investment in the subsidiary on the parent's books at acquisition dates.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    6 views7 pages

    Acquisition Analysis Cost Method: Operating Income - Excluding Dividend Income

    Uploaded by

    Nicolyn Rae Escalante
    1. The document appears to be an analysis of the acquisition of a subsidiary by a parent company on multiple dates, showing the allocation of costs to assets and goodwill. 2. It includes income statements of the parent and subsidiary separately and consolidated for multiple years post-acquisition. 3. Eliminating entries are shown to account for the investment in the subsidiary on the parent's books at acquisition dates.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 7

    ACQUISITION ANALYSIS 0.80 0.

    20 COST METHOD
    CI NCI Total Operating income
    Acquisition cost, 12-31-20x4 192.00 48.00 240.00 Dividend income
    BV/FV of net assets, 12-31-20x4 (192.00) (48.00) (240.00) Net income, parent
    Goodwill - - -
    ACQUISITION DATE, 10-0
    P S (conso) Total Note:
    CI 143.00 28.00 171.00 operating income -
    NCI 7.00 7.00 excluding dividend
    income
    Conso 143.00 35.00 178.00 CI
    NCI
    CONSO (20x4)
    ACQUISITION DATE, 03-01-20X4 ACQUISITION DATE, 03-01-20X4
    Gain on sale of sub: 5k, 02-01-20x4 Gain on sale of sub: 5k, 07-01-20x4

    Net income 35.00 Net income


    Gain on sale 5.00 Gain on sale
    Net income before gain 30.00 Net income before gain

    P S Total P
    12 mos. 10 mos. 12 mos.
    CI 143.00 20.00 163.00 CI 143.00
    NCI 5.00 5.00 NCI
    CONSO (20x4) 25.00 168.00 CONSO (20x4)
    COST METHOD
    Operating income 143.00
    Dividend income 15.00 12.00
    Net income, parent 155.00

    ACQUISITION DATE, 10-01-20X4

    P S Total
    12 mos 3 mos
    143.00 7.00 150.00
    1.75 1.75
    CONSO (20x4) 8.75 151.75
    TE, 03-01-20X4
    ub: 5k, 07-01-20x4 CI in subs' SHE NCI in subs SHE
    192.00 48.00
    35.00 Subs net income 7.00 1.75 8.75
    11.00 Dividends, 12-31 (12.00) (3.00) (15.00)
    24.00 187.00 46.75

    S Total
    10 mos.
    24.80 167.80
    6.20 6.20
    31.00 174.00
    Share purchased 375.00
    Issued 550.00
    Treasury (50.00)
    Outstanding 500.00
    % of ownership 75%

    Acquisition analysis
    0.75 0.25
    CI NCI Total
    Cost FV of CI
    3.00 375.00 1,125.00 250.00 1,375.00 FV of NCI
    BV of NA (630.00) (210.00) (840.00) FV of subs
    Excess 495.00 40.00 535.00
    Land (15.00) (5.00) (20.00)
    Equipment 27.00 9.00 36.00
    Inventory 9.00 3.00 12.00
    Goodwill 516.00 47.00 563.00
    Partial Full

    PARENT'S BOOKS (01-01-2016)


    Investment in subsidiary 1,125.00
    Cash 1,125.00

    ELIMINATING ENTRY (01-01-2016)


    Common Stock 550.00 Investment In Subs 21.00
    Share Premium 250.00 NCI 7.00
    RE 120.00 Land 20.00
    Reval Surp 20.00 Equipment
    TS 100.00 Inventory
    IIS 630.00
    NCI 210.00

    Goodwill 516.00
    Investment in Subsidiary 516.00

    ELIMINATING ENTRY (12-31-2022)


    DATE OF ACQUISITION ENTRIES (CTRL+c & ctrl+v)
    PRIOR YEARS (6 YEARS) Revaluation Surplus
    Share of NCI in Subs' SHE 20.00 8.00 12/31/2021, books
    RE OCI 12.00 2nd
    1/1/2022 316.00 20.00 20.00 20.00
    Transfer to RE 12.00 (12.00)
    1/1/2022 (books) 328.00 8.00 1st Accumulated depreciation
    (12.00) 12.00 Inventory
    316.00 20.00 Retained earnings
    1/1/2016 120.00 20.00 NCI
    Net increase 196.00 -
    Retained earnings 12.00 CONSO SHE, 12-31-2022
    Revaluation surplus 12.00 Common APIC
    1/1/2016 900.00 700.00
    Retained earnings 49.00 Dividends
    NCI 49.00 parent 2016
    2017
    CURRENT YEAR (2022) 2018
    Dividend income 9.00 NCI
    NCI 3.00 2016
    Retained earnings 12.00 2017
    2019
    NO MORE!!!!!!!!!!! 2021
    Conso Income
    Income - NCI 14.00 2016 103.20
    NCI 14.00 2017 133.20
    2018 (28.80)
    2019 107.70
    2020 137.20
    2021 96.50
    Transfer (6 years out of 10 years)
    01-01-2022 900.00 700.00
    Conso Income
    Dividends
    Transfer
    12/31/2022 900.00 700.00

    PARENT SUBSIDIARY
    Net incom Div. incomeOperating Net income Amortization of excess Net income
    books Inventory Equipmentconso
    2,016.00 50.00 6.00 44.00 40.00 12.00 7.20 59.20
    2,017.00 75.00 9.00 66.00 60.00 7.20 67.20
    2,018.00 (20.00) (20.00) (16.00) 7.20 (8.80)
    2,019.00 60.00 7.50 52.50 48.00 7.20 55.20
    2,020.00 72.00 72.00 58.00 7.20 65.20
    2,021.00 58.00 7.50 50.50 46.00 46.00
    2,022.00 70.00 9.00 61.00 56.00 56.00
    2,023.00 56.00 6.75 49.25 45.00 45.00
    750.00
    250.00 0.25
    1,000.00

    36.00
    12.00

    2/31/2021, books

    36.00
    12.00
    36.00
    12.00
    RE OCI TS NCI CI
    400.00 150.00 - 203.00 1,125.00 1. Controlling Interest in subs' SHE, 12/31/

    (20.00) 3. NCI, 01-01-2020


    (40.00) 4. 2023 Income attributable to CI
    (30.00) 5. NCI, 12-31-2023 (FULL)

    (2.00) (6.00) (8.00) NCI, 12-31-2019 (partial)


    (3.00) (9.00) (12.00) GW, impaired
    (2.50) (7.50) (10.00) NCI, 12-31-2019 (full)
    (2.50) (7.50) (10.00)
    SHE, 12-31-2019 (w/o CP)
    88.40 14.80 44.40 CI, 12-31-2019 (w/o CP)
    116.40 16.80 50.40 Control premium
    (26.60) (2.20) (6.60) CI, 12-31-2019 (w/ CP)
    93.90 13.80 41.40
    120.90 16.30 48.90 CS
    85.00 11.50 34.50 APIC
    90.00 (90.00) RE
    878.00 60.00 - 264.00 OCI
    103.00 14.00 NCI
    (5.00) (3.00)
    15.00 (15.00)
    991.00 45.00 - 275.00
    11.25
    conso (2.25)
    Net 284.00 (partial)
    Income 47.00
    103.20 331.00 Full
    133.20
    (28.80)
    107.70
    137.20
    96.50
    117.00
    94.25
    t in subs' SHE, 12/31/ 1,232.10

    238.70
    butable to CI 83.00

    238.70
    47.00
    285.70
    0.25
    1,142.80
    857.10
    375.00
    1,232.10

    900.00
    700.00
    533.20
    105.00
    227.40
    2,465.60

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