Consolidated Workpaper (Intercompany sales of inventory, plant assets) (100 Points)
On October 2, 2021, Monian Corporation acquired 90 percent of Mathilda Company’s outstanding common stock. In exchange for Mathilda’s stock, Monian issued bonds payable with a par value of 720,000 and fair value of $750,000 directly to the selling stockholders of Mathilda. At that date, the fair value of the noncontrolling interest was $150,000. The two companies continued to operate as separate entities subsequent to the combination.
Immediately prior to the combination, the book values and fair values of the companies’ assets
and liabilities were as follows:
UJIAN TENGAH SEMESTER GENAP Consolidated Workpaper (Intercompany sales of inventory, plant assets) (100 Points) On October 2, 2021, Monian Corporation acquired 90 percent of Mathilda Company’s outstanding common stock. In exchange for Mathilda’s stock, Monian issued bonds payable with a par value of 720,000 and fair value of $750,000 directly to the selling stockholders of Mathilda. At that date, the fair value of the noncontrolling interest was $150,000. The two companies continued to operate as separate entities subsequent to the combination. Immediately prior to the combination, the book values and fair values of the companies’ assets and liabilities were as follows: Monian Mathilda Book Value Fair Value Book Value Fair Value Cash $ 120,000 $ 120,000 $ 90,000 $ 90,000 Receivables 410,000 390,000 310,000 300,000 Allowance for Bad Debts (20,000) (10,000) Inventory 860,000 890,000 680,000 720,000 Land 550,000 2,000,000 500,000 700,000 Buildings & Equipment 9,600,000 6,500,000 6,700,000 5,000,000 Accumulated Depreciation (4,110,000) (2,200,000) Patent 400,000 Monian Assets $7410,000 $9,900,000 $6,070,000 $7,210,000 Current Payables $ 380,000 $ 380,000 $ 290,000 $ 290,000 Bonds Payable 2,000,000 2,100,000 1,000,000 1,000,000 Common Stock 3,000,000 2,000,000 Additional Paid-in Capital 1,000,000 1,300,000 Retained Earnings 1,030,000 1,480,000 Monian Liabilities & Equity $,7410,000 $6,070,000 At the date of combination, Mathilda owed Monian $6,000 plus accrued interest of $500 on a short- term note. Both companies have properly recorded these amounts. There is following month transaction are as follow: October 5 Mathilda purchase inventory from Flames Inc. for $ 15,000 to fulfill Monian needs. October 8 Monian purchase that item for $ 25,000 October 10 Monian sells equipment to Mathilda which has been bought in October 10, 2019 for $ 10,000 that projected to be used for 4 years. Monian sells the equipment for $ 6,000 October 20 Max sells the only land to Monian for $65,000 October 31 Below is the income statement for Mathilda dan Monian Monian Mathilda Sales 700.000 550.000 COGS (220.000) (180.000) Depreciation Expense (125.000) (90.000) Other Expenses (225.000) (125.000) October 31 Monian paid dividen for $ 60.000 and Max paid dividen for $ 45.000 Required a. Record the business combination on the books of Monian Corporation! b. Present in general journal form all elimination entries needed in a worksheet to prepare a con- solidated balance sheet immediately following the business combination on October 2, 2021. c. Prepare and complete a consolidated balance sheet worksheet as of October 2, 2021, immediately following the business combination. d. Present a consolidated balance sheet for Monian and its subsidiary as of October 2, 2021.