Prepare the Investment Analysis for Priya Company’s Investment in Sheldon account ON JANUARY 1, XXXXXXXXXXPOINTS); Recreate the JOURNAL ENTRIES recorded by Priya to account for its investment in...

Prepare the Investment Analysis for Priya Company’s Investment in Sheldon account ON JANUARY 1, 2022 (4 POINTS); Recreate the JOURNAL ENTRIES recorded by Priya to account for its investment in Sheldon Company on January 1, 2022, and



Microsoft Word - ACC545 OA ASSIGN 1 SUM23 1 NAME ____________________________ ACCOUNTING 545 ONLINE ASYNC SUMMER, 2023 ASSIGNMENT #1 CHAPTERS 1&2 TO EARN ANY POSSIBLE PARTIAL CREDIT FOR ANY INCORRECT ANSWERS SUBMITTED ON D2L TO QUESTIONS 1 THROUGH 4 OF THE ASSIGNMENT, YOU ARE REQUIRED TO ALSO COMPLETE QUESTION 5 OF THE ASSIGNMENT AND SUBMIT THIS COMPLETED DOCUMENT AS A SINGLE PDF OR WORD DOCUMENT, OR EXCEL FILE TO D2L BY 11:59PM ON WEDNESDAY, 06/21/23 (54 POINTS) NOTE: EDUCATIONAL RESEARCH INDICATES THAT HANDWRITING YOUR SOLUTION MAY RESULT IN BETTER UNDERSTANDING AND RETENTION OF THE MATERIAL. Priya Corporation acquired 100 percent of Sheldon Company stock on January 1, 2022, for $850,000 cash. Following are pre-closing trial balance amounts for Priya Corporation and Sheldon Company as of December 31, 2022: Additional Information: 1. On January 1, 2022, the book values of Sheldon’s net assets and liabilities approximated fair values. 2. Priya Corporation uses the equity method to account for its Investment in Sheldon Company. 3. The general ledger numbers given above (HINT: those in boldface) include the effects of the JOURNAL ENTRIES that were recorded by Priya at the acquisition date and during 2022 to account for its investment in Sheldon Company. These boldface figures should be used as check figures for your solution. PRIYA CORPORATION SHELDON CORPORATION Debit Credit Debit Credit Cash $719,500 $249,900 Accounts Receivable 294,000 224,000 Inventory 473,000 219,000 Investment in Sheldon Corp. 1,175,600 Buildings 625,000 252,500 Land 807,000 291,000 Equipment 315,000 345,000 Cost of Goods Sold 342,000 237,500 Depreciation Expense, Building 58,600 15,600 Depreciation Expense, Equipment 41,300 21,900 Selling & Administrative Expense 159,000 108,400 Dividends Declared 60,000 45,000 Accumulated Depreciation, Bldg $243,400 $78,000 Accumulated Depreciation, Equip 156,200 65,700 Accounts Payable 178,000 111,500 Bonds Payable 515,000 150,600 Common Stock ($1 par) 659,000 295,000 Additional Paid In Capital 1,374,800 345,000 Retained Earnings (01/01/2022) 788,500 210,000 Sales 784,500 754,000 Income from Sheldon Corp. 370,600 - $5,070,000 $5,070,000 $2,009,800 $2,009,800 2 REQUIRED:(CLEARLY SHOW ALL OF YOUR WORK). a. Prepare the Investment Analysis for Priya Company’s Investment in Sheldon account ON JANUARY 1, 2022 (4 POINTS) Fair Value of Consideration given from Priya Company to Sheldon’s Shareholders: $ MINUS: MINUS: Book Value of Sheldon Company’s Net Identifiable Assets $ EQUALS: Differential (if any) $ NEW GOODWILL (IF ANY) $ b. Recreate the JOURNAL ENTRIES recorded by Priya to account for its investment in Sheldon Company on January 1, 2022, and during 2022. (10 POINTS) c. Using your information from b. above, calculate the 12/31/22 balances for Priya Company’s Investment in Sheldon and Income from Sheldon accounts. Use the T accounts provided below. (USE AS A CHECK POINT – 0 POINTS) Priya Company’s General Ledger Investment in Sheldon Income from Sheldon d. Prepare the necessary CONSOLIDATION WORKSHEET ENTRY on December 31, 2022. (20 POINTS) 3 e. Prepare the consolidation worksheet for the period ended December 31, 2022. Use the (picture format) template provided below. (20 POINTS) PRIYA CORPORATION Consolidation Worksheet For the Period Ending December 31, 2022 PRIYA'S SHELDON'S CONSOLIDATION ENTRIES Consolidated Accounts G/L G/L Debit Credit Totals Income Statement Sales 784,500$ 754,000$ Less: Cost of Goods Sold (342,000)$ (237,500)$ Less: Depreciation Expense, Building (58,600)$ (15,600)$ Less: Depreciation Expense, Equipment (41,300)$ (21,900)$ Less: Selling & Administrative Expense (159,000)$ (108,400)$ Income from Sheldon Corp. 370,600$ Net Income 554,200$ 370,600$ Statement of Retained Earnings Retained Earnings (01/01/2022) 788,500$ 210,000$ Net income (above) 554,200$ 370,600$ Dividends Declared (60,000)$ (45,000)$ Retained earnings, 12/31/22 1,282,700$ 535,600$ Balance Sheet Cash 719,500$ 249,900$ Accounts Receivable 294,000$ 224,000$ Inventory 473,000$ 219,000$ Investment in Sheldon Corp. 1,175,600$ Buildings 625,000$ 252,500$ Land 807,000$ 291,000$ Equipment 315,000$ 345,000$ Accumulated Depreciation, Bldg (243,400)$ (78,000)$ Accumulated Depreciation, Equip (156,200)$ (65,700)$ Total Assets 4,009,500$ 1,437,700$ Accounts Payable 178,000$ 111,500$ Bonds Payable 515,000$ 150,600$ Common Stock ($1 par) 659,000$ 295,000$ Additional Paid In Capital 1,374,800$ 345,000$ Retained earnings, 12/31/22 (above) 1,282,700$ 535,600$ Total Liabilities & Stockholders' Equity 4,009,500$ 1,437,700$ NET ASSETS ASSETS - LIABILITIES TOTAL STOCKHOLDERS' EQUITY