Advance Accounting
Pirate Corporation acquired 60 percent ownership of Ship Company on January 1, 2OX8, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 40 percent of the book value of Ship Company. Accumulated depreciation on Buildings and Equipment was $70,000 on the acquisition date. Trial balance data at December 31, 20X8, for Pirate and Ship are as follows: Pirate Corporation ship Company Item Debit Credit Debit Credit Cash $ 31,000 $ 10,000 Accounts Receivable 79,000 26,000 Inventory 44,000 34,000 Buildings 0 Equipment 504,000 245,000 Investment in Row Company 43,000 Investment in Ship Company 101,040 Cost of Goods Sold 145,000 105,000 Depreciation Expense 26,000 6,000 Interest Expense 6,000 2,000 Dividends Declared 29,000 24,600 Accumulated Depreciation $131,000 $ 76,000 Accounts Payable 53,000 19,000 Bonds Payable 118,440 94,600 Common Stock 197,000 91,000 Retained Earnings 205,000 51,000 other Comprehensive Income from Ship Company (OCI)Unrealized Gain on Investments 6,000 Unrealized Gain on Investments (OCI) 10,000 Sales 230,000 154,000 Income from Ship Company 24,600 $965,040 $965,040 $495,600 $495,600 Additional Information Ship purchased stock of Row Company on January 1, 20X8, for $33,000 and classied the investment as available-forsale securities. The value of Row's securities increased to $43,000 at December 31, 20X8. Required: a. Record all consolidation entries needed to prepare a threepart consolidation worksheet as of December 31, 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list Record the basic consolidation entry. Record the entry for Other Comprehensive Income. Record the optional accumulated depreciation consolidation entry. Note : . = journal entry has been entered view transaction list Consolidation Worksheet Entries Record the basic consolidation entry. Note: Enter debits before credits. view consolidation entries Record entry b. Prepare a three-part consolidation worksheet for 20X8 in good form. (Values in the rst 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 debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entriI one amount and enter this amount in the credit column of the worksheet.) Income Statement ____ Sales Less: COGS Less: Depreciation expense Less: Interest expense Income from snip company ____ Consolidated net income = NCI in net' Income __ Controlling Interest' In Net Income - Beginning balance __ Net' Income = _ Less: Dividends declared _ _ Ending Balance _ Balance Sheet _ Ending Balance ___! Cash Accounts receivable Inventory Buildings and equipment Less: Accumulated depreciation Investment in Row Company Investment in Ship Company Total Assets Accounts payable Bonds payable Common stock Retained earnings Accumulated OCI NCI in NA of Ship Company Total Liabilities and Equity Other comprehensive income to NCI _ - Accumulated Other Comprehensive Income, 12131I20X8 _ PIRATE CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X8 Assets Total Assets Liabilities Stockholders' Equity: Controlling Interest: Total Controlling Interest Total Stockholder's Equity Total Liabilities and Stockholders' Equity\fConsolidated net income _ Other comprehensive income: _ Unrealized gain on investments held by subsidiary _ Total consolidated comprehensive income _ Less: Comprehensive income attributable to noncontrolling interest _ Comprehensive income attributable to controlling interest _
