Prepare a consolidation worksheet


On January 1, 2011, John Doe Enterprises (JDE) acquired a 55% interest in Bubba Manufacturing, Inc. (BMI). JDE paid for the transaction with $3 million cash and 500,000 shares of JDE common stock (par value $1.00 per share). At the time of the acquisition, BMI's book value was $16,970,000.
On January 1, JDE stock had a market value of $14.90 per share and there was no control premium in this transaction. Any consideration transferred over book value is assigned to goodwill. BMI had the following balances on January 1, 2011.

For internal reporting purposes, JDE employed the equity method to account for this investment.


Required:
Prepare a consolidation worksheet for this business combination. Assume goodwill has been reviewed and there is no goodwill impairment.

 

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: Prepare a consolidation worksheet
Reference No:- TGS082239

Expected delivery within 24 Hours