Jet CorpAcquired All of the Outstanding Shares of Nittle Inc

question 64

Essay

Jet Corp.acquired all of the outstanding shares of Nittle Inc.on January 1,2009,for $644,000 in cash.Of this price,$42,000 was attributed to equipment with a ten-year remaining useful life.Goodwill of $56,000 had also been identified.Jet applied the partial equity method so that income would be accrued each period based solely on the earnings reported by the subsidiary.
On January 1,2012,Jet reported $280,000 in bonds outstanding with a book value of $263,200.Nittle purchased half of these bonds on the open market for $135,800.
During 2012,Jet began to sell merchandise to Nittle.During that year,inventory costing $112,000 was transferred at a price of $140,000.All but $14,000 (at Jet's selling price)of these goods were resold to outside parties by year's end.Nittle still owed $50,400 for inventory shipped from Jet during December.
The following financial figures were for the two companies for the year ended December 31,2012. $\begin{array}{lll}&\text {Jet Corp.}&\text {Nittle Inc.}\\ \text { Revenues } & \$(894,600) & \$(652,400) \\\text { Cost of goods sold } & 483,000 & 277,200 \\\text { Expenses } & 187,600 & 225,400 \\\text { Interest expense-bonds } & 33,600 & 0 \\\text { Interest income-bond investment } & 0 & (15,400) \\\text { Equity in income of Nittle Inc. } & \underline{(165,200)} & \underline{0} \\\text { Net income } & \underline{\$(355,600)} & \underline{\$(165,200)}\\\\\text { Retained earnings, January } 1,2012 & \$(483,000) & \$(505,400) \\\text { Net income (above) } & (355,600) & (165,200) \\\text { Dividends paid } & \underline{217,000} & \underline{85,400} \\\text { Retained earnings, December } 31,2012 & \underline{\$(621.600)} & \underline{\$(585.200)}\\\\\text { Cash and receivables } & \$ 186,200 & \$ 109,200 \\\text { Inventory } & 239,400 & 121,800 \\\text { Investment in Nittle Inc. } & 851,200 & 0 \\\text { Investment in Jet Corp. bonds } & 0 & 137,200 \\\text { Land, buildings, and equipment (net) } & \underline{348,600} & \underline{757,400} \\\text { Total assets } & \$ 1.625 .400 & \$ 1.125 .600\\\\\text { Accounts payable } & \$(315,000) & \$(232,400) \\\text { Bonds payable } & (280,000) & (140,000) \\\text { Discount on bonds payable } & 11,200 & 0 \\\text { Common stock } & (420,000) & (168,000) \\\text { Retained earnings, December 31,2012 (above) } & \underline{(621,600)} & \underline{(585,200)} \\\text { Total liabilities and stockholders equity } & \$(1,625,400) & \$(1.125,600)\end{array}$

Required:
Prepare a consolidation worksheet for the year ended December 31,2012.

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Definitions:

CRM

Customer Relationship Management, an approach to manage a company's interaction with current and potential customers, often using data analysis to improve relationships.

Dining Experience

The overall experience of a customer when eating out, including the food quality, service, ambiance, and any other aspects that contribute to satisfaction.

Menu Items

Specific foods or beverages offered for selection by customers at a restaurant or similar establishment.

Quality Service

The degree of excellence of a service, judged against customer expectations and needs.