On January 1, 2015, the Herco Company purchased 70% of the outstanding voting share of the Wing Company for $ 850,000 in cash

On January 1, 2015, the Herco Company purchased 70% of the outstanding voting share of the Wing Company for $ 850,000 in cash. On that date, the Wing Company had retained earnings of $ 400,000 and common shares of $ 500,000. On the acquisition date, the identifiable assets and liabilities of the Wing Company had fair values that were equal to their carrying values except for the building, which had a fair value 200,000 greater that its carrying value, and long term liabilities which had fair values that were $ 100,000 great than their carrying values. The building had a remaining useful life of ten years on January 1, 2015 and the long term liabilities mature on December 31, 2021. Both companies use the straight line method to calculate all depreciation and amortization. The trial balances of the Herco Company and Wing Company on December 31, 2019 are contained on the attached excel sheet.

Trial Balance                                                                                                                            Consolidation Adjustments December 31, 2019. 

Don't use plagiarized sources. Get Your Custom Essay on
On January 1, 2015, the Herco Company purchased 70% of the outstanding voting share of the Wing Company for $ 850,000 in cash
Just from $13/Page
Order Essay

                                                            Herco         Herco               Wing            Wing 

                                                            Debit          Credit               Debit           Credit                                  Debit                    Credit 

Assets

Cash                                                 50,000                                  10,000

Accounts receivable                     220,000                               100,000

Account receivable, Wing             80,0000

Inventories                                   2,700,000                               520,000

Equipment (net)                          6,150,000                              2,500,000

Buildings (net)                             2,600,000                                500,000

Investment in Bond                      250,000

Investment in Wing(cost)            850,000 

Liabilities and Equity 

Accounts payable                                              280,000                                   170,000

Account payable, Wing                                     20,0000

Long term liabilities                                        4,000,000                                   600,000

Bond payable                                                                                                        500,000

Common shares                                              3,000,000                                   500,000

Retained earnings, beginning of year           4,500,000                                1,600,000

Dividends declared and paid in year                200,000                                   20,000

Revene and Expenses

Sales revenue                                                    3,500,000                                 900,000

Other revenue                                                      300,000                                    30,000

Cost of goods sold                       2,000,000                            400,000

Depreciation expense                     300,000                            100,000

Other expenses                               200,000                            150,000

                                                  15,600,000  15,600,000 4,300,000  4,300,000

Calculate your order
Pages (275 words)
Standard price: $0.00
Client Reviews
4.9
Sitejabber
4.6
Trustpilot
4.8
Our Guarantees
100% Confidentiality
Information about customers is confidential and never disclosed to third parties.
Original Writing
We complete all papers from scratch. You can get a plagiarism report.
Timely Delivery
No missed deadlines – 97% of assignments are completed in time.
Money Back
If you're confident that a writer didn't follow your order details, ask for a refund.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00
Power up Your Academic Success with the
Team of Professionals. We’ve Got Your Back.
Power up Your Study Success with Experts We’ve Got Your Back.
error: Content is protected !!
Live Chat+1(978) 822-0999EmailWhatsApp

Order your essay today and save 20% with the discount code GOODESSAY