(Module 1 only) Mini Review: Consolidation (no worksheet): Cost Method The following six ac counts appear on...
Question:
(Module 1 only) Mini Review: Consolidation (no worksheet): Cost Method The following six ac¬
counts appear on the separate company financial statements (as opposed to a trial balance) of Partex and its 100%-owned subsidiary, Sartex (created in 2001), at the end of 2007:
Partex Sartex Investment Dividend income in subsidiary
(from Sartex)
Common stock .
$ 200,000 40,000 100,000
$ 20,000 Additional paid-in capital . 400,000 180,000 Retained earnings . 660,000 90,000 Dividends declared . (123,000) (40,000) Additional information:
Retained earnings at 1/1/07 . $ 610,000 $144,000 1 What consolidation entries are required at 12/31/07?
2 What is the consolidated retained earnings amount at 12/31/07?
3 What amount is reported as dividends in the consolidated statement of retained earnings for 2007?
4 What is the subsidiary’s net income for 2007?
Step by Step Answer: