AC450's Unit 3 acquisition date worksheet uses two entries, S and A, to eliminate a 6,400,000 investment and 4,200,000 of glassworks equity, leaving 24,800,000 of consolidated assets. Searches like "ac 450 unit 3 assignment example", "ac450 unit 3 sample" and "ac450 unit 3 example" land here.
What a finished AC450 Unit 3 acquisition date worksheet looks like
A single wide worksheet with columns for the parent, the glassworks, debit and credit eliminations, the noncontrolling interest and the consolidated total, followed by a one-page key. The parent column holds the 6,400,000 investment and an earn-out liability of 200,000; the glassworks column holds 5,500,000 of assets at book value. Entry S removes the glassworks' common stock of 1,000,000 and retained earnings of 3,200,000, crediting the investment 3,360,000 and the noncontrolling interest 840,000. Entry A adds the fair value adjustments and goodwill, credits equipment 200,000, and removes the remaining 3,040,000 of investment while lifting the noncontrolling interest by 660,000 to its 1,500,000 fair value. Consolidated assets total 24,800,000, liabilities 8,300,000 and equity 16,500,000. Every row totals across, and the eliminations columns agree at 8,100,000.
How a AC450 Unit 3 example is structured
The worksheet is read from the investment outward. Entry S comes first because it pairs two amounts that describe the same claim, the parent's investment and the glassworks' equity, and removing both at book value leaves only the excess to explain. Entry A then explains that excess asset by asset, and the key writes one sentence for every line of that entry: the building is written up because its appraisal exceeds depreciated cost, equipment is written down because the machines are older than their book lives assumed, and goodwill is what remains. No income statement columns appear, since nothing has yet been earned. Retained earnings in the consolidated column is the parent's alone, 9,000,000, and a note explains why the glassworks' accumulated earnings before the purchase belong to no consolidated figure. The noncontrolling interest sits in its own column so its 1,500,000 can be traced to both entries.
Columns before numbers
Parent, glassworks, debit and credit eliminations, noncontrolling interest, consolidated. The key explains that the fifth column exists because 20 percent of the glassworks belongs to someone outside the group.
Entry S at book value
Common stock of 1,000,000 and retained earnings of 3,200,000 come out; the investment is credited 3,360,000 and the noncontrolling interest 840,000, the family's 20 percent of book equity.
Entry A and its one credit to an asset
Debits of 3,900,000 to five assets and goodwill; credits to equipment 200,000, investment 3,040,000 and noncontrolling interest 660,000. The equipment credit is the line most often reversed by mistake.
Whose retained earnings survive
Only the parent's 9,000,000. The glassworks' 3,200,000 accumulated before the purchase was bought rather than earned by the group, so it leaves the worksheet with entry S.
Proof that the columns close
Eliminations agree at 8,100,000 on each side, the investment row reaches zero, and consolidated assets of 24,800,000 equal liabilities of 8,300,000 plus 16,500,000 of equity.
Where marks go in AC450 Unit 3
Graders tend to look at three places before they look at the totals. Carrying the glassworks' 3,200,000 of retained earnings into the consolidated column double counts equity the parent paid for, usually the largest single deduction in this unit. Recording the noncontrolling interest at 840,000, its share of book value, drops the 660,000 of fair value and goodwill the family owns. Absorbing the 200,000 equipment write-down into goodwill misstates two lines while every total still agrees. The key carries weight too: entries posted with no sentence saying what each removes tend to earn partial credit even when every figure is right. Leaving the earn-out liability off the parent column, or placing it in equity, costs less but is noticed, since it changes the investment being eliminated.
Get a AC450 Unit 3 example written to your instructions
For Unit 3, the two balance sheets as of the acquisition date, the price paid, the ownership percentage and any appraisal figures the problem supplies are the inputs; the rubric decides how long the key runs. A first custom worksheet is free, balanced to the dollar, and back within 24-48h.
AC450 Unit 3 questions, answered
Why is there no income statement on the acquisition date worksheet?
Because the group has not existed long enough to earn anything. On the acquisition date, consolidation combines balance sheets only, and the glassworks' income before that morning belongs to the period before the parent owned it. Income statement columns arrive in later units, once the group has operated together, and the key mentions this so the omission reads as deliberate.
What do the letters S and A stand for?
They follow a common textbook convention: S eliminates the subsidiary's stockholders' equity against the investment, and A allocates the excess of fair value over book value to specific accounts and goodwill. Other texts number the entries or use different letters. The sample can follow whatever labels the course text uses, and the amounts do not change.
Can the worksheet be built on my own problem's balances?
Yes. Send both balance sheets, the purchase terms, the percentage acquired and any appraisal data, with the rubric. The worksheet comes back with entries sized to your figures, a key that explains each elimination in a sentence, and a check row proving the columns agree, so every removed amount can be traced to the fact that required it.