Jet Corp. acquired all of the outstanding shares of Nittle Inc. on January 1, 2009, for $644,000 in cash. Of this price, $42,000 was attributed to…

Jet Corp. acquired all of the outstanding shares of Nittle Inc. on January 1, 2009, for $644,000 in cash. Of this price, $42,000 was attributed to equipment with a ten-year remaining useful life. Goodwill of $56,000 had also been identified. Jet applied the partial equity method so that income would be accrued each period based solely on the earnings reported by the subsidiary.On January 1, 2012, Jet reported $280,000 in bonds outstanding with a book value of $263,200. Nittle purchased half of these bonds on the open market for $135,800.During 2012, Jet began to sell merchandise to Nittle. During that year, inventory costing $112,000 was transferred at a price of $140,000. All but $14,000 (at Jetâs selling price) of these goods were resold to outside parties by year’s end. Nittle still owed $50,400 for inventory shipped from Jet during December.The following financial figures were for the two companies for the year ended December 31, 2012.Jet Corp.Nittle Inc.Revenues$(894,600)$(652,400)Cost of goods sold 483,000 277,200Expenses 187,600 225,400Interest expense-bonds 33,600 0Interest income-bond investment 0 (15,400)Equity in income of Nittle Inc. (165,200) 0Net income$(355,600)$ (165,200)Retained earnings, January 1, 2012$(483,000)$(505,400)Net income (above) (355,600) (165,200)Dividends paid 217,000 85,400Retained earnings, December 31, 2012$(621,600)$(585,200)Cash and receivables $186,200$109,200Inventory 239,400 121,800Investment in Nittle Inc. 851,200 0Investment in Jet Corp. bonds 0 137,200Land, buildings, and equipment (net) 348,600 757,400Total assets$ 1,625,400$1,125,600Accounts payable $(315,000) $(232,400)Bonds payable (280,000) (140,000)Discount on bonds payable 11,200 0Common stock (420,000) (168,000)Retained earnings, December 31,2012 (above) (621,600) (585,200)Total liabilities and stockholders equity$(1,625,400)$(1,125,600)Required:Prepare a consolidation worksheet for the year ended December 31, 2012.

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Jet Corp. acquired all of the outstanding shares of Nittle Inc. on January 1, 2009, for $644,000 in cash. Of this price, $42,000 was attributed to… was first posted on October 8, 2020 at 12:18 am.
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