Matthews Co

question 23

Essay

Matthews Co.acquired all of the common stock of Jackson Co.on January 1,2010.As of that date,Jackson had the following trial balance:
During 2010,Jackson reported net income of $96,000 while paying dividends of $12,000.During 2011,Jackson reported net income of $132,000 while paying dividends of $36,000.
Assume that Matthews Co.acquired the common stock of Jackson Co.for $588,000 in cash.As of January 1,2010,Jackson's land had a fair value of $102,000,its buildings were valued at $188,000,and its equipment was appraised at $216,000.Any excess of consideration transferred over fair value of assets and liabilities acquired is due to an unamortized patent to be amortized over 10 years.
Matthews decided to use the equity method for this investment.
Required:
(A. )Prepare consolidation worksheet entries for December 31,2010.
(B. )Prepare consolidation worksheet entries for December 31,2011.
$\begin{array}{c}\begin{array}{lll}\\ \text {Accounts payable}\\ \text {Accounts receivable}\\ \text {Additional paid-in capital}\\ \text {Buildings-net (20-year life)}\\ \text {Cash and short-term investments}\\ \text {Common stock}\\ \text {Equipment-net (8-year life)}\\ \text {Inventory}\\ \text {Land}\\ \text {Long-term liabilities (mature 12/31/12)}\\ \text {Retained earnings, 1/1/10}\\ \text {Supplies}\\ \text {Totals}\end{array}\begin{array}{lll}\underline{\text {Debit}}\\\\\$ 50,000 \\\\140.000\\70,000\\\\240,000\\110.000\\90,000\\\\\\\underline{20.000}\\\underline{\underline{\$ 720.000}} \end{array}\begin{array}{r}\underline{\text { Credit }}\\\$ 60,000 \\\\60,000 \\\\\\300,000 \\\\\\\\180,000 \\120,000 \\\underline{\quad\quad}\\\underline{\underline{ \$ 720,000}} \\ \end{array}\end{array}$

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Definitions:

Appendicular Skeleton

Part of the skeleton that includes the bones of the upper and lower limbs, as well as the girdles (shoulder bones and pelvic bones) that attach them to the axial skeleton.

Axial Skeleton

The part of the skeleton that consists of the bones of the head and trunk, including the skull, spine, ribs, and sternum.

Hyoid

A U-shaped bone in the neck that supports the tongue and provides attachment points for some neck muscles, unique because it does not directly articulate with other bones.

Neck Region

An anatomical area that extends from the base of the head to the shoulders, containing structures such as the cervical vertebrae and various muscles and glands.