On December 31, 2011 PDI Ltd acquired 100% of the company ABC for $100,000. At the day of acquisition fair values equalled book values. The tax rate for both entities is 30%.
On December 31, 2013 the following are the individual financial statements for both companies:
Additional information:
1. PDI Ltd. loaned ABC Company $30,000 at an interest rate of 7% on January 1, 2013, payable annually on December 31.
2. PDI Ltd. has included both quarterly and final dividends from ABC Company in revenue.
3. On June 30, 2013 PDI Ltd. sold inventory costing $25,000 to ABC Company for $40,000. All of this inventory was sold to external entities for $60,000 before December 31, 2013.
4. In 2012, PDI Ltd. Sold land to ABC Company for $15,000 above its original recorded cost. The land is still held by ABC Company as at December 31, 2013.
Required: Prepared the consolidated financial statements at December 31, 2013for PDI Ltd and its subsidiary.

Question

On December 31, 2011 PDI Ltd acquired 100% of the company ABC for $100,000. At the day of acquisition fair values equalled book values. The tax rate for both entities is 30%.
On December 31, 2013 the following are the individual financial statements for both companies:
  Additional information:
1. PDI Ltd. loaned ABC Company $30,000 at an interest rate of 7% on January 1, 2013, payable annually on December 31.
2. PDI Ltd. has included both quarterly and final dividends from ABC Company in revenue.
3. On June 30, 2013 PDI Ltd. sold inventory costing $25,000 to ABC Company for $40,000. All of this inventory was sold to external entities for $60,000 before December 31, 2013.
4. In 2012, PDI Ltd. Sold land to ABC Company for $15,000 above its original recorded cost. The land is still held by ABC Company as at December 31, 2013.
Required: Prepared the consolidated financial statements at December 31, 2013for PDI Ltd and its subsidiary.

Quizplus · Accepted Answer

The Answer of On December 31, 2011 PDI Ltd acquired 100% of the company ABC for $100,000. At the day of acquisition fair values equalled book values. The tax rate for both entities is 30%.
On December 31, 2013 the following are the individual financial statements for both companies:
  Additional information:
1. PDI Ltd. loaned ABC Company $30,000 at an interest rate of 7% on January 1, 2013, payable annually on December 31.
2. PDI Ltd. has included both quarterly and final dividends from ABC Company in revenue.
3. On June 30, 2013 PDI Ltd. sold inventory costing $25,000 to ABC Company for $40,000. All of this inventory was sold to external entities for $60,000 before December 31, 2013.
4. In 2012, PDI Ltd. Sold land to ABC Company for $15,000 above its original recorded cost. The land is still held by ABC Company as at December 31, 2013.
Required: Prepared the consolidated financial statements at December 31, 2013for PDI Ltd and its subsidiary.

On December 31, 2011 PDI Ltd Acquired 100% of the Company