Prima Corporation acquired 7 0 percent interest in Serumpun Corporation on January 1 , 2 0 2
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Question:
Prima Corporation acquired percent interest in Serumpun Corporation on January for $ in cash, at which time Serumpun's capital structure consisted of capital stock of $ and retained earnings of $ A year later, with Prima's blessing, Serumpun purchased a percent interest in Prima for $ at which time Prima's capital structure included capital stock of $ and retained earnings of $ The book value of both companies is equal to their fair value. Thus, between Prima and Serumpun there has been MUTUAL HOLDING.
Separate earnings and dividends data for the two companies for are as follows:
Prima Corporation
Serumpun Corporation
Separate earnings
Dividends
REQUESTED:
If Prima Corporation applies CONVENTIONAL APPROACH for this mutual holding:
Calculate the INCOME FROM SERUMPUN that will be recorded and reported by Prima Corporation in its Income Statement for
Create all EQUITY METHOD APPLICATION JOURNALS for by Prima Corporation based on available data only.
Create an ELIMINATION JOURNAL in the Consolidated Working Paper which is SPECIFICALLY related to the application of CONVENTIONAL METHOD only.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: