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Session 5—Post- Acquisition Accounting. 100% post-acquisition accounting Investment analysis Consolidation entries. Parent Co. Invest. Analysis Update. Entries on Parrot’s G/L. PCI 100 Equity in NI-S 100 Cash 40 PCI 40 Equity in NI-S 7 PCI 7.

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session 5 post acquisition accounting
Session 5—Post- Acquisition Accounting
  • 100% post-acquisition accounting
    • Investment analysis
    • Consolidation entries

Advanced Accounting-2012

parent co invest analysis update
Parent Co. Invest. Analysis Update

Advanced Accounting-2012

entries on parrot s g l
Entries on Parrot’s G/L

PCI 100

Equity in NI-S 100

Cash 40

PCI 40

Equity in NI-S 7

PCI 7

To record Sun earnings

To record Sun dividends

To record excess amort. on FV.

Advanced Accounting-2012

consolidation entries on w s
Consolidation Entries on W/S
  • See Parrot Company worksheet:
  • Entry S: Basic subsidiary S/E elimination
  • Entry A: FV alloc. @ beg. of year
  • Entry P: Intracompany rec/pay elimination
  • Entry I: Intracompany income elimination
  • Entry D: Intracompany dividend elimination
  • Entry E: Excess allocation expense recognition
  • Other factors
    • Accumulated depreciation balance at acquisition elimination

Advanced Accounting-2012

w s elimination entries
W/S Elimination Entries

Entry S

  • Capital Stock-sub XXX

Beg. S. R/E XXX

Investment in sub XXX

  • Misc. assets XXX

Investment in sub XXX

Entry A

Advanced Accounting-2012

w s elimination entries1
W/S Elimination Entries

Entry P

  • Intercompany payable XXX

Intercompany receivable XXX

  • Equity in NI of sub XXX Investment in sub XXX
  • Investment in sub XXX Intracompany dividends XXX

Entry I

Entry D

Advanced Accounting-2012

w s elim entries cont
W/S Elim. Entries, cont.

Entry E

  • Miscellaneous expenses XXX Miscellaneous assets XXX

Advanced Accounting-2012

consolidation exercise
Consolidation Exercise
  • Using the information on pps. 84-94:
    • Update the Parrot Investment Analysis
    • Record the appropriate entries that would appear on Parrot’s G/L
    • Record the appropriate consolidation entries that would appear on the consolidation w/s
    • Be sure to include any intercompany eliminations

Advanced Accounting-2012