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Door Company acquired 90% of Floor Companys outstanding common stock for $270,000 on January 1,2020 , when the book value and fair value of Floor's
Door Company acquired 90% of Floor Companys outstanding common stock for $270,000 on January 1,2020 , when the book value and fair value of Floor's net assets was equal to $300,000. Door uses the equity method to account for investments. At end of 2020 Floor reported net income $75,000 and paid $20,000 dividends. The following trial balance summarizes the financial position and operations for Door and Floor as of December 31, 2021: Required: 1. Prepare required entries in Door Company at end of 2021 2. Prepare the elimination entries at end of 2021 3. Complete the consolidated worksheet shown below 4. Prepare Consolidated Income Statement \begin{tabular}{|c|c|c|c|c|c|} \hline \multirow{3}{*}{\begin{tabular}{|l|} \\ Income Statement \\ Sales \end{tabular}} & \multirow[t]{2}{*}{\begin{tabular}{c} Door \\ Company \end{tabular}} & \multirow[t]{2}{*}{\begin{tabular}{c} Floor \\ Company \end{tabular}} & \multicolumn{2}{|c|}{\begin{tabular}{c} Elimination \\ Entires \end{tabular}} & \multirow[t]{2}{*}{ Consolidated } \\ \hline & & & Dr & Cr & \\ \hline & $850,000 & $300,000 & & & \\ \hline Less: CGS & ($270,000) & ($150,000) & & & \\ \hline Dep. Exp & ($50,000) & ($10,000) & & & \\ \hline Other Exp. & ($230,000) & ($60,000) & & & \\ \hline \multicolumn{6}{|l|}{ Income from SF } \\ \hline Net Income & & $80,000 & & & \\ \hline \multicolumn{6}{|l|}{\begin{tabular}{l} Less: NCl share from \\ Income \end{tabular}} \\ \hline \multicolumn{6}{|l|}{NI assigned from Cl} \\ \hline \multicolumn{6}{|l|}{ RE Statement } \\ \hline Beg. Balance & $517,500 & $155,000 & & & \\ \hline Add: Net Income & & $80,000 & & & \\ \hline Less: Dividends & ($225,000) & ($30,000) & & & \\ \hline End. Balance & $664,500 & $205,000 & & & \\ \hline \multicolumn{6}{|l|}{ Balance Sheet } \\ \hline \multicolumn{6}{|l|}{ Assets } \\ \hline Cash & $255,000 & $75,000 & & & \\ \hline A/R & $190,000 & $80,000 & & & \\ \hline Inventory & $180,000 & $100,000 & & & \\ \hline Land & $200,000 & $100,000 & & & \\ \hline Building \& Equipment & $700,000 & $200,000 & & & \\ \hline Acc. Dep. & ($500,000) & ($30,000) & & & \\ \hline \multicolumn{6}{|l|}{\begin{tabular}{l} Investment in Floor \\ Stock \end{tabular}} \\ \hline Total Assets & & $525,000 & & & \\ \hline \multicolumn{6}{|l|}{ Liabilities \& Equity } \\ \hline \multicolumn{6}{|l|}{ Liabilities } \\ \hline A/P & $75,000 & $35,000 & & & \\ \hline B/P & $150,000 & $85,000 & & & \\ \hline Total Liabilities & $225,000 & $120,000 & & & \\ \hline CS & $500,000 & $200,000 & & & \\ \hline RE & & $205,000 & & & \\ \hline \multicolumn{6}{|l|}{NCl} \\ \hline Total Equity & & $405,000 & & & \\ \hline \multicolumn{6}{|l|}{NCl} \\ \hline Total Liabilities \& Equity & & $525,000 & & & \\ \hline \end{tabular}
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