Consolidation of less than wholly owned subsidiaries solutions

ACC 405 Final Project One Guidelines and Rubric

Overview

The first final project for this course is to prepare computations, consolidation entries, and a consolidation worksheet in an Excel worksheet. This worksheet focuses on the consolidation of the parent company and a less-than-wholly-owned subsidiary with differential, intercompany transfers and indebtedness. Additionally, you will create a memo outlining the unique calculations required on the consolidation worksheet and on the statement of cash flows if Posey also obtains an international subsidiary with non-US$ functioning currency. The final product represents an authentic demonstration of competency because accounting professionals are often asked to work within complex or unique business situations. Your response will rely heavily on using accounting standards to create reports, as well as considering any outstanding factors that could affect the report. Final Project One has one milestone, which will be submitted in Module Four to scaffold learning and ensure quality final submissions. Final Project One will be submitted in Module Six. In this assignment, you will demonstrate your mastery of the following course competencies:

 ACC-405-01: Analyze economic activity of complex or unique business situations

 ACC-405-02: Use accounting standards to create various financial reports intended for a variety of stakeholders.

Prompt

Review the Project One Scenario document. Then address the critical elements listed below. Most of the critical elements align with a particular course outcome (shown in brackets).

I. Excel Workbook: In this section you will prepare computations, consolidation entries, and a consolidation worksheet for the preparation of consolidated financial statements for 20X7. Do not round your intermediate calculations. Round your final answer to the nearest whole dollar. If no entry is required for a transaction/event, select “No journal entry required” in the first account field. In regard to the three-part worksheet for the preparation of consolidated financial statements, values in the first two columns (the “parent” and “subsidiary” balances) that are to be deducted should be indicated with a minus sign, while all values in the “Consolidation Entries” columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.

A. Calculate the amount of the goodwill as of January 1, 20X7. [ACC-405-01]

https://learn.snhu.edu/d2l/lor/viewer/view.d2l?ou=6606&loIdentId=22961
https://learn.snhu.edu/d2l/lor/viewer/view.d2l?ou=6606&loIdentId=22962
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B. Calculate the balance of investment Posey has in the Stargell Stock account as of January 1, 20X7. [ACC-405-01] C. Calculate the income that should be assigned to the noncontrolling interest in the 20X7 consolidated income statement. [ACC-405-01] D. Calculate the total noncontrolling interest as of December 31, 20X6. [ACC-405-01] E. Calculate the gain or loss on the constructive retirement of Stargell’s bonds that should appear in the 20X7 consolidated income statement.

[ACC-405-01] F. Present all consolidation entries that would appear in a three-part consolidation worksheet as of December 31, 20X7. [ACC-405-02] G. Prepare and complete a three-part worksheet for the preparation of consolidated financial statements for 20X7. [ACC-405-02]

II. Memo: Assume Posey were to obtain an international subsidiary with non-US$ functioning currency. Prepare a short memo that addresses the following critical elements:

A. Outline the unique calculations required to complete the consolidation worksheet. [ACC-405-02] B. Outline the unique calculations required on the statement of cash flows. [ACC-405-02]

Milestones

Milestone One: Consolidation Calculations, Entries, and Worksheets In Module Four, you will submit an Excel worksheet. This milestone will have the completed calculations and consolidation entries for the requirements for this project. This milestone will be graded with the Milestone One Rubric. Final Submission: Consolidation Workbook and Memo In Module Six, you will submit Final Project One. It should be a complete, polished artifact containing all of the critical elements of the final product. It should reflect the incorporation of feedback gained throughout the course. In addition to revising your milestone work, make sure that you include Section II: Memo, which was not included in the milestone. This submission will be graded with the Final Project One Rubric.

Deliverables

Milestone Deliverable Module Due Grading

One Consolidation Calculations, Entries, and Worksheets

Four Graded separately; Milestone One Rubric

Final Project One: Consolidation Workbook and Memo

Six Graded separately; Final Project One Rubric

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Final Project One Rubric

Guidelines for Submission: Your Excel workbook must be completed thoroughly. The memo should follow these guidelines: 1–2 pages in length, double spaced, 12-point Times New Roman font, one-inch margins, and citations in APA style.

Critical Elements Exemplary Proficient Needs Improvement Not Evident Value

Excel Workbook: Goodwill [ACC-405-01]

Accurately calculates the amount of goodwill as of January 1, 20X7 (100%)

Calculates the amount of goodwill but does not consider the date of January 1, 20X7, or response contains errors or is illogical (70%)

Does not calculate the amount of goodwill as of January 1, 20X7 (0%)

9.50

Excel Workbook: Balance of Investment [ACC-405-01]

Accurately calculates the balance of investment as of January 1, 20X7 (100%)

Calculates the balance of investment but does not consider the date of January 20X7, or response contains errors or is illogical (70%)

Does not calculate the balance of investment as of January 1, 20X7 (0%)

9.50

Excel Workbook: Assigned Income

[ACC-405-01]

Accurately calculates the income assigned to noncontrolling interest with the 20X7 consolidated income statement (100%)

Calculates the income assigned to noncontrolling interest but does not consider the year of 20X7, or response contains errors or is illogical (70%)

Does not calculate the income assigned to noncontrolling interest with the 20X7 consolidated income statement (0%)

9.50

Excel Workbook: Noncontrolling Interest

[ACC-405-01]

Accurately calculates the total noncontrolling interest as of December 1, 20X6 (100%)

Calculates the total noncontrolling interest but does not consider the date of December 1, 20X6, or response contains errors or is illogical (70%)

Does not calculate the total noncontrolling interest (0%)

9.50

Excel Workbook: Gain or Loss

[ACC-405-01]

Accurately calculates the gain or loss on the constructive retirement of Stargell’s bonds on the 20X7 consolidated income statement (100%)

Calculates the gain or loss on the constructive retirement of Stargell’s bonds but does not consider the 20X7 statement, or answer contains errors or is illogical (70%)

Does not calculate the gain or loss on the constructive retirement of Stargell’s bonds (0%)

9.50

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Critical Elements Exemplary Proficient Needs Improvement Not Evident Value

Excel Workbook: Three- Part Consolidation Entries

[ACC-405-02]

Clearly and thoughtfully presents all consolidation entries that would appear in a three-part consolidation worksheet as of December 31, 20X7 (100%)

Presents consolidation entries but is missing information that would appear in a three-part consolidation worksheet, or does not consider the date of December 31, 20X7 (70%)

Does not present consolidation entries that would appear in a three-part consolidation worksheet (0%)

11.88

Excel Workbook: Three- Part Worksheet

[ACC-405-02]

Prepares and completes a three-part worksheet for the preparation of consolidated financial statements for 20X7 (100%)

Prepares and completes a three-part worksheet, but finished work contains inaccuracies (70%)

Does not prepare or complete a three-part worksheet (0%)

11.88

Memo: Unique Calculations for

Consolidation Worksheet [ACC-405-02]

Meets “Proficient” criteria and uses industry-specific language to establish expertise (100%)

Outlines the unique calculations required to complete the consolidation worksheet (85%)

Includes some calculations but not all required calculations (55%)

Does not outline the unique calculations required to complete the consolidation worksheet (0%)

11.88

Memo: Unique Calculations For

Acquisition [ACC-405-02]

Meets “Proficient” criteria and demonstrates a complex grasp of the unique calculations required (100%)

Outlines the unique calculations required on the statement of cash flows (85%)

Outlines some but not all calculations required on the statement of cash flows (55%)

Does not outline the unique calculations required on the statement of cash flows (0%)

11.88

Articulation of Response Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy to read format (100%)

Submission has no major errors related to citations, grammar, spelling, syntax, or organization (85%)

Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas (55%)

Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas (0%)