Please show your calculations using Excel functions ! On January 1, 2014, Pond Co. paid $192,000 to acquire10% of Ramp Co.

Please show your calculations using Excel functions !

1. On January 1, 2014, Pond Co. paid $192,000 to acquire10% of Ramp Co. Pond appropriately uses fair value method to account for its investment in Ramp. During 2014, Ramp generated net income of $360,000 and paid a cash dividend of $84,000 to its stockholders. Ramp’s stocks are not publicly traded, and therefore the fair values are not available.

On January 1, 2015, Pond Co. acquired an additional 30% of Ramp Co. for $720,000, and gained significant influence over Ramp. On that date, Ramp reported assets and liabilities with book values of $3,036,000 and $840,000, respectively.  A building owned by Ramp had an appraised value of $360,000, although it had a book value of only $216,000.  This building had a 12-year remaining life and no salvage value.  It was being depreciated on the straight-line basis. Ramp’s other assets and liabilities have fair values approximate to their book values.

Ramp generated net income of $420,000 in 2015, and paid a cash dividend of $108,000 to its stockholders. In 2015, Ramp sold inventory to Pond for $216,000.  This inventory had cost only $129,600.  Pond resold $144,000 of the inventory during 2015 and the rest is expected to be sold during 2016.

Prepare all of Pond Co.’s journal entries for its investment in Ramp Co. for year of 2014 and 2015. Note: a retroactive adjustment to the equity method is not required for the initial 10% investment.

2. On January 1, 2015, Peking Company purchased a 20% interest in Sara Company by cash. The purchase price of $295,200 reflected an assessment that all of Sara’s accounts were fairly valued within the company’s accounting records (i.e., book values are approximate to the fair values). Peking appropriately applied the equity method to this investment.

On Sep. 30, 2015, Peking acquired an additional 70% interest in Sara and provided the following fair value assessments of Sara’s ownership components:

Cash transferred by Peking for 70% interest                    $1,764,000

Fair value of Peking’s 20% previous ownership                   420,000

Fair value of Noncontrolling interest’s 10%                         210,000

Total acquisition-date fair value                                       $2,394,000

As of Sep 30, 2015, Sara’s book value was 1,860,000. Peking assessed a $240,000 value to an unrecorded customer contract recently negotiated by Sara. The customer contract is anticipated to have a remaining life of 4 years. Sara’s other assets and liabilities were judged to have fair values equal to their book values. Any remaining excess fair value was attributed to goodwill. Peking elects to continue applying the equity method to this investment for internal reporting purpose.

Sara reported net income of $120,000 for 2015 and paid annual cash dividends of $36,000 on Oct 15, 2015. Sara’s income was assumed to be earned evenly throughout the year and no changes in Sara’s stocks have occurred.

A. Prepare all journal entries by Peking (parent company) on its internal accounting records (General Journal) for 2015 related to its investments in Sara company.

B. Calculate the balances for noncontrolling interest as of Dec 31, 2015.

3. Matthews Co. acquired 80% of the common stocks of Jackson Co. on January 1, 2014.  As of that date, Jackson had the following trial balance:

                                                                             Debit                   Credit

Cash and cash equivalents                              $  98,000

Accounts receivable (net)                                   70,000

Inventory                                                           154,000

Supplies                                                               28,000

Land                                                                   126,000

Buildings-net (20 years remaining life)             196,000

Equipment-net (8 years remaining life)             336,000

Accounts payable                                                                        $   84,000

Long-term liabilities (mature 12/31/2018)                                     252,000

Common stocks                                                                              420,000

Additional paid-in capital                                                                 84,000

Retained earnings, 1/1/2014                                         168,000

Totals                                                              $1,008,000         $1,008,000

Matthews Co. acquired 80% of the common stock of Jackson Co. for $784,000 in cash. The fair value of 20% noncontroling interest is $179,200. As of January 1, 2014, Jackson's land had a fair value of $142,800. Its buildings had a fair value of $235,200, and its equipment had a fair value of $302,400. Its long-term liabilities had a fair value of 224,000. It’s unrecorded in- process Research and Development was valued at $140,000. All other assets and liabilities had fair values equal to their book values.

Matthews decided to use the initial value method for this investment.

During 2014, Jackson reported net income of $134,000 while paying dividends of 16,000.  During 2015, Jackson reported net income of $184,000 while paying dividends of 50,000.

  Prepare consolidation entries for December 31, 2015.