You will continue your work with Roberts Corporation and William Company.Over the next two years, William continued selling inventory to Roberts. Assume that any items in intercompany inventory at the...

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You will continue your work with Roberts Corporation and William Company.




Over the next two years, William continued selling inventory to Roberts. Assume that any items in intercompany inventory at the end of a given year were sold to outside parties in the following year. Below are the details of the intercompany inventory sales:



























































































Year











Intercompany sales











Intercompany ending inventory at transfer price











Gross profit rate on intercompany inventory transfers








2014










$125,000







$80,000










25%







2015










$220,000










$125,000







28%







2016










$300,000










$160,000










25%











In addition to these transfers of inventory, William sold a building to Roberts on January 1, 2015, for $126,000. The book value of the building was only $70,000 on that date. The building had an eight-year remaining useful life at the time of the transfer and is depreciated using the straight-line method with no salvage method. The building remains on Robert's books as of December 31, 2016.




Separate financial statements for both companies as of December 31, 2016, are shown below:


























































































































































































































































































































































































































































Roberts















William









Revenues







$(1,740,000)










$(950,000)







Cost of goods sold










$820,000










$500,000







Depreciation expense










$104,000







$85,000







Amortization expense







$220,000










$120,000







Interest expense










$20,000







$15,000







Income from Subsidiary










$(129,600)














0









Net Income










$(705,600)














$(230,000)









Retained earnings, 1/1/14







$(2,856,000)










$(487,000)







Net Income (above)










$(705,600)










$(230,000)







Dividends paid













$200,000












$25,000








Retained earnings, 12/31/14










$(3,361,600)














$(692,000)









Cash







$535,000










$115,000







Accounts receivable










$575,000










$215,000







Inventory










$990,000










$800,000







Investment in William Stock










$1,481,600










0







Buildings and equipment (net)










$1,025,000










$905,000







Patents










$950,000














$107,000









Total assets













$5,556,600















$2,142,000









Accounts payable







$(450,000)







$(200,000)







Notes payable










$(545,000)







$(450,000)







Common stock










$(900,000)










$(700,000)







Additional paid-in capital







$(300,000)










$(100,000)







Retained earnings, 12/31/14 (above)










$(3,361,600)














$(692,000)









Total liabilities and stockholders' equity










$(5,556,600)














$(2,142,000)












Tasks:







Part I





Based on the information given above, complete the following tasks using the excel sheet created inWeek 1:







  • Prepare all of the necessary eliminating entries needed at December 31, 2016, using Microsoft Excel.



  • Prepare the consolidated income statement, retained earnings statement, and balance sheet as of December 31, 2016, using Microsoft Excel. Be sure to show clearly the noncontrolling interest in both net income and stockholders' equity on your worksheet.









Part II





Robert's management has recently become vaguely aware of the requirements for FASB Statement No. 131, "Disclosures about Segments of an Enterprise and Related Information." Since both Roberts and William operate in a single industry segment, management assumes that they are not subject to the disclosure requirement of SFAS 131.




Draft a one- to two-page memorandum in a Microsoft Word document to your president indicating how, if at all, SFAS 131 applies to your company. Provide succinct but complete communication and, given the nature of the audience, avoid the use of accounting jargon.





Submission Details







  • Cite any sources you use using the correct APA format on a separate page.



Answered 1 days AfterJan 25, 2023

Answer To: You will continue your work with Roberts Corporation and William Company.Over the next two years,...

Mayuri answered on Jan 27 2023
36 Votes
FASB Statement No. 131, "Disclosures about Segments of an Enterprise and Related Information
An en
tity is required to prepare its financial statements in such a way that it should present what and in which region, the company is performing. An entity should mention information regarding the segment whether it’s operating or not to evaluate the nature and financial effects of the business. according to FASB statement number 131 which talks about disclosures segment surprise and related information, the public entity should present reporting information about operating segments in the interim as well as annual financial statements. The reporting information has been defined in the respective standard. The reporting information can be...
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