3.

Following are financial statements for Moore Company

and Kirby Company for 2015. Moore Kirby...
3. Following are financial statements for Moore Company and Kirby Company for 2015. Moore
Kirby...

3. Following are financial statements for Moore Company and Kirby Company for 2015.
Moore Kirby
S
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3. Following are financial statements for Moore Company and Kirby Company for 2015. Moore
Kirby...

3. Following are financial statements for Moore Company and Kirby Company for 2015.
Moore Kirby
Sales (864,000) (648,000)
Cost of goods sold 540,000 432,000
Operating and interest expense 108,000 165,600
Net income (216,000) (50,400)
Retained earnings, 1/1/15 (1,069,200) (594,000)
Net income (216,000) (50,400)
Dividends paid 140,400 7,200
Retained earnings, 12/31/15 (1,144,800) (637,200)
Cash and receivables 234,360 194,400
Inventory 241,920 172,800
Investment in Kirby 709,560 -
Equipment (net) 648,000 453,600
Buildings 1,080,000 702,000
Accumulated depreciation-buildings (108,000) (216,000)
Other assets 216,000 108,000
Total assets 3,021,840 1,414,800
Liabilities (1,229,040) (615,600)
Common stock (216,000) (43,200)
Additional paid-in capital (432,000) (118,800)
Retained earnings, 12/31/15 (1,144,800) (637,200)
Total liabilities and equity (3,021,840) (1,414,800)

Moore purchased 90% of Kirby on January 1, 2014, for $702,000 in cash. On that date, the 10%
noncontrolling interest was assessed to have a fair value of $78,000. As of January 1, 2014,
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Kirby had common stock $43,200, additional paid-in capital $118,800, and retained earnings
$507,600. Also at the acquisition date, Kirby held equipment (4-year remaining life) whose fair
value is higher than the book value by $21,600, and an interest-bearing liability (5-year
remaining life) whose fair value is lower than book value by $43,200. The rest of the excess fair
value was assigned to goodwill.

Moore uses the initial value method to account for the investment in Kirby.

During 2014, Kirby earned a net income of $86,400 and paid no dividends.

Each year, Kirby sells inventory to Moore with a gross profit rate of 20%. Intra-entity sales were
$172,000 in 2014 and $216,000 in 2015. On December 31, 2014, 30% of the 2014 transfers
were still on hand and, on December 31, 2015, 40% of the 2015 transfers remained.

Moore sold a building to Kirby on January 2, 2014. It had originally cost Moore $120,000 but
had $103,000 in accumulated depreciation at the time of this transfer. The sale price was
$31,000 in cash. At that time, the building has a five-year remaining life.

Required: Prepare consolidation entries for December 31, 2015

3. Following are financial statements for Moore Company and Kirby Company for 2015. Moore
Kirby...

3. Following are financial statements for Moore Company and Kirby Company for 2015.
Moore Kirby
Sales (864,000) (648,000)
Cost of goods sold 540,000 432,000
Operating and interest expense 108,000 165,600
Net income (216,000) (50,400)
Retained earnings, 1/1/15 (1,069,200) (594,000)
Net income (216,000) (50,400)
Dividends paid 140,400 7,200
Retained earnings, 12/31/15 (1,144,800) (637,200)
Cash and receivables 234,360 194,400
Inventory 241,920 172,800
Investment in Kirby 709,560 -
Equipment (net) 648,000 453,600
Buildings 1,080,000 702,000
Accumulated depreciation-buildings (108,000) (216,000)
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 Other assets 216,000 108,000
Total assets 3,021,840 1,414,800
Liabilities (1,229,040) (615,600)
Common stock (216,000) (43,200)
Additional paid-in capital (432,000) (118,800)
Retained earnings, 12/31/15 (1,144,800) (637,200)
Total liabilities and equity (3,021,840) (1,414,800)

Moore purchased 90% of Kirby on January 1, 2014, for $702,000 in cash. On that date, the 10%
noncontrolling interest was assessed to have a fair value of $78,000. As of January 1, 2014,
Kirby had common stock $43,200, additional paid-in capital $118,800, and retained earnings
$507,600. Also at the acquisition date, Kirby held equipment (4-year remaining life) whose fair
value is higher than the book value by $21,600, and an interest-bearing liability (5-year
remaining life) whose fair value is lower than book value by $43,200. The rest of the excess fair
value was assigned to goodwill.

Moore uses the initial value method to account for the investment in Kirby.

During 2014, Kirby earned a net income of $86,400 and paid no dividends.

Each year, Kirby sells inventory to Moore with a gross profit rate of 20%. Intra-entity sales were
$172,000 in 2014 and $216,000 in 2015. On December 31, 2014, 30% of the 2014 transfers
were still on hand and, on December 31, 2015, 40% of the 2015 transfers remained.

Moore sold a building to Kirby on January 2, 2014. It had originally cost Moore $120,000 but
had $103,000 in accumulated depreciation at the time of this transfer. The sale price was
$31,000 in cash. At that time, the building has a five-year remaining life.

Required: Prepare consolidation entries for December 31, 2015

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