Past Questions: (Comprehensive Question 2021), assuming that other factors such as VAT and corporate income tax are not considered.
On 1 January 2020, Company A paid a bank deposit of $400 millionUnrelated Parties60% of the equity of Company B, to achieve control over it. Company B on the same dayRecognizableThe carrying amount of net assets is $600 million, and the fair value is equal to the book value, of which the share capital is $300 million, the capital reserve is $50 million, the surplus reserve is $150 million, and the undistributed profit is $100 million.
AnalyticsSince it is a controlling stake in Company B obtained from a non-related party, it is a business combination that is not under the same control, and the merger cost is the total consideration of 400 million yuan, and the accounting entries in the individual statements are as follows
Borrow:Long-term equity investment 40 000
Credit: bank deposits 40 000
Company A paid 400 million yuan, and what it got was 60% of company B (net assets of 600 million yuan), that is, 60 000 60% = 360 million yuanConsolidated goodwill) = Consolidation cost Share of the fair value of the investee's identifiable net assets 40 000 36 000 =10,000 yuan
The offsetting entries between the long-term equity investment and the net assets of the subsidiary on the date of purchase are as follows:
Borrow: share capital 30 000
Capital reserve 5000
Surplus reserve 15000
Undistributed profit 10000
Goodwill
Credit: Long-term equity investment 40 000
Minority interests 24 000
Interpretation: Minority interests = 40 000 60% = 24 million yuan, goodwill has been calculated as 40 million yuan.
Fact 1: On July 1, 2020, Company A sold off an intangible asset A for management at a price of 7.7 million yuanSold to Company BThe original price of the intangible asset is $10 million, the estimated useful life is 10 years, and the amortization is made using the straight-line method, and $3 million has been amortized. Company B acquires the intangible asset for use in the management department, adopts the straight-line method of amortization, and is expected to have a useful life of 7 years and an estimated net residual value of 0.
Analytics: A (parent company) sells intangible assets to B (subsidiary), which belongsDownstreamTransactions,Not implementedInsider trading gains and losses need to be offset. Company B obtains the intangible assets for the management department, intangible assetsAmortizationMeaningImplementationGains and losses on insider tradingAmortizationPercent, meansImplementationhow many percent".Gains and losses on insider trading
The offsetting entries for unrealized gains and losses on internal transactions in 2020 are as follows:
Debit: Gains and losses on disposal of assets 70
Credit: Intangible assets 70
Interpretation: The book value of intangible assets = 1000-300 = 7 million yuan, 7.7 million yuan was sold, 770-700 = 700,000 yuan was earned, and the profit and loss on internal transactions (profit or loss on asset disposal) was 700,000 yuan, which needs to be offset.
Borrow: Intangible assets 5
Credit: Administrative Expenses 5
Interpretation: From the perspective of consolidation, the intangible assets of Company B in 2020and moreThe amount of amortization = 70 7 2 = 50,000 yuan, the consolidated statement does not recognize its value-added, it does not recognize its amortization, so the amortization of 50,000 yuan needs to be reversed (it can also be understood that after amortization, it means that part of the internal transaction profit and loss is realized, so the management expenses are credited, which means that the profit increases, so as to realize the internal transaction income).
Information 2: As of December 31, 2020, there were signs of impairment of intangible asset A, and through the impairment test, its recoverable amount is expected to be 7.05 million yuan.
AnalyticsIn the individual statements of Company B, the half-year depreciation is 770 7 2 = 550,000 yuan, and the book value is 770-55 = 7.15 million yuan, and the recoverable amount is 7.05 million yuan, and the impairment is 715-705 = 100,000 yuan, so the impairment of Company B is as follows:
Debit: Asset impairment loss 10
Credit: Provision for impairment of intangible assets 10
However, from the perspective of group consolidation, the book value of the intangible asset should be 700-700 7 2 = 6.5 million yuanThe recoverable amount of 7.05 million yuan has not been impaired, therefore, it is requiredRush backThe adjustment entries for impairment losses accrued by subsidiaries are as follows:
Borrow: Intangible assets 10
Credit:Asset impairment losses
Information 3In 2020, Company B achieved a net profit of 70 million yuan and withdrew 7 million yuan from the statutory surplus reserve.
AnalyticsSince the fair value of the identifiable net assets on the date of purchase is the same as the book value, there is no need to adjust the net profit of the subsidiary, and the amount that Company A should share according to 70% of the equity share (Investment income) = 7000 60% = 42 million yuan, the adjustment entries are as follows:
Borrow: Long-term equity investment 4200
Credit: Investment income 4200
Interpretation: The consolidated statements are accounted for according to the equity method, and the long-term equity investment and investment income increased by 42 million yuan at the same time, and after adjustment, the book balance of long-term equity investment = initial 40 000 + adjusted 4200=10,000 yuan
Long-term equity investmentThe offsetting entries with the net assets of the subsidiary are as follows:
Borrow: share capital 30 000
Capital reserve 5000
Surplus reserve 15700
Undistributed profit 16300
Goodwill
Credit: Long-term equity investment 44 200
Minority interests 26 800
Interpretation: The share capital and capital reserve remain unchanged, and the surplus reserve = initial 15,000 + provision= 157 million yuan, undistributed profit = initial 10 000 + net profit 7000 Withdrawal of surplus reserve 700 = 163 million yuan, goodwill remains unchanged, minority shareholders' equity = net assets at the end of the period(Initial 60 000 + net profit 7000) 40% = 268 million yuan.
Investment incomeOffset with the distribution of profits of subsidiaries:
Borrow: Investment income 4200
Minority profit and loss 2800
Undistributed profit – 10,000 at the beginning of the year
Credit: Withdrawal of surplus reserve 700
Undistributed profit – 16,300 at the end of the year
Interpretation: Minority shareholders' profit and loss = subsidiary's net profit for the current periodMinority ownership= 28 million yuan, undistributed profit - year-end = undistributed profit of the subsidiary at the beginning of the year 10 000 + net profit of the current year 7 000 surplus reserve 700 = 163 million yuan.
Other information: The accounting policies of Company A and Company B are the same for the accounting period.
The requirements and answers of the past questions are as follows, and will not be interpreted in detail:
(1) Prepare the relevant accounting entries for Company A to obtain 60 shares of Company B on January 1, 2020.
Borrow: 40 000 long-term equity investment
Credit: bank deposits 40 000
(2) Calculate the amount of goodwill at the time of acquisition of equity by Company A on January 1, 2020, and prepare offsetting entries related to the consolidated statements.
Goodwill Consolidation cost Share of fair value of identifiable net assets of the investee 40 000 60 000 60 4 000 (10,000 yuan).
Offsetting Entries: Debit: Share Capital 30000
Capital reserve 5000
Surplus reserve 15000
Undistributed profit 10000
Goodwill 4000
Credit: Long-term equity investment 40 000
Minority interests 24 000
(3) Preparation of adjustments and offsetting entries related to the consolidated balance sheet and consolidated income statement of Company A as of December 31, 2020.
Company A's long-term equity investment was adjusted from the cost method to the equity method
Borrow: Long-term equity investment 4200
Credit: Investment income 4200
Offset of Company A's long-term equity investment and Company B's owner's equity at the end of 2020:
Borrow: share capital 30 000
Capital reserve 5000
Surplus reserve 15700
Undistributed profit 16300
Goodwill 4000
Credit: Long-term equity investment 44 200
Minority interests 26 800
Offset between the investment income of Company A and the profit distribution of Company B:
Borrow: Investment income 4200
Minority profit and loss 2800
Undistributed profit – 10,000 at the beginning of the year
Credit: Withdrawal of surplus reserve 700
Undistributed profit – 16,300 at the end of the year
Set-off of intangible asset transactions within Company A and Company B:
Debit: Gain on disposal of assets 70
Credit: Intangible assets 70
Borrow: Intangible assets 5
Credit: Administrative Expenses 5
At the end of the year, from the perspective of the group's financial statements, the book value of intangible assets was 700 700 7 6 12 650 (10,000 yuan), and the recoverable amount was 7.05 million yuan, and there was no impairment and no provision for impairment.
From the perspective of individual statements, the carrying value of intangible assets is 770 770 7 6 12 715 (10,000 yuan), the recoverable amount is 7.05 million yuan, and the provision for impairment is 715 705 10 (10,000 yuan).
The offsetting entries are:
Borrow: Intangible assets 10
Credit: Asset impairment loss 10