E5-13 Consolidation Worksheet for Majority-Owned Subsidiary LO 5-2
Proud Corporation acquired 80 percent of Spirited Companys voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Spirited at that date. Assume that the accumulated depreciation on depreciable assets was $60,000 on the acquisition date. Proud uses the equity method in accounting for its ownership of Spirited during 20X3. On December 31, 20X3, the trial balances of the two companies are as follows:
ES-13 Consolidation Worksheet for Majority-Owned Subsidiary LO 5-2 Proud Corporation acquired 80 percent of Spirited Company's voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Spirited at that date. Assume that the accumulated depreciation on depreciable assets was $60,000 on the acquisition date. Proud uses the equity method in accounting for its ownership of Spirited during 20X3. On December 31, 20X3, the trial balances of the two companies are as follows: 173000 Current Assets Investment in Spinted Company Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Deb Common Stock Retained Eamings 25.000 % 75.000 Income from Spirited Compay 505,000 $506.000 Required: a. Prepare all consolidation entries required as of December 31, 20X3, to prepare consolidated financial statements. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Worksheet Entries Record the basic consolidation entry. Note: Enter Consolidation Workseet Entries Record the optional accumulated depreciation consolidation entry Note: Enter debits before credits. Event Accounts Debit Credit b. Prepare a three-part consolidation worksheet. (Values in the first 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 all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) Worksheet for Consolidated Financial Statements DR Income Statement Less: Depreciation expense Less: Other expenses Income from Spinted Co. NCI in Net income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance Balance Sheet Current assets Investment in Spirited Co Total Assets Liabilities and Equity Current liabilities Long-term debt Common stock Retained eamings NCI in NA of Spirited Co. Total Liabilities and Equity c. Prepare a consolidated balance sheet, income statement, and retained earnings statement for 20X3. (Amounts to be deducted should be indicated with a minus sign.) E5-13 Consolidation Worksheet for Majority-Owned Subsidiary LO 5-2 Proud Corporation acquired 80 percent of Spirited Company's voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Spirited at that date. Assume that the accumulated depreciation on depreciable assets was $60,000 on the acquisition date. Proud uses the equity method in accounting for its ownership of Spirited during 20X3. On December 31, 20X3, the trial balances of the two companies are as follows: Proud Corporation Spirited Company Debit CreditDebit Credit tem Current Assets Depreciable Assets Investment in Spirited Company Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Debt Common Stock Retained Earnings Sales Income from Spirited Company $105,000 300, 000 500,000 136,000 25,000 105,000 40, 000 15,000 75,000 10,000 $175,000 50,000 100,000 200, 000 230, 000 200,000 24,000 s 75,000 40,000 120, 000 100,000 50,000 120,000 $979,000 $979,000 $505000 $505, 000 Required: a. Prepare all consolidation entries required as of December 31, 20X3, to prepare consolidated financial statements. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list transaction list Prev 1 of 3 Next >
