Question
Emerald Corporation acquired 10,500 shares of the common stock and 800 shares of the 8 percent preferred stock of Pert Company on December 31, 20X4,
Emerald Corporation acquired 10,500 shares of the common stock and 800 shares of the 8 percent preferred stock of Pert Company on December 31, 20X4, at the book value of the underlying stock interests. At that date, the fair value of the noncontrolling interest in Pert's common stock was equal to 30 percent of the book value of its common stock interest. Pert reported the following balance sheet amounts on January 1, 20X5: |
Cash | $ | 30,000 | Accounts Payable | $ | 20,000 | |
Accounts Receivable | 70,000 | Bonds Payable | 100,000 | |||
Inventory | 120,000 | Preferred Stock | 200,000 | |||
Buildings & Equipment | 600,000 | Common Stock | 150,000 | |||
Less: Accumulated Depreciation | (150,000 | ) | Retained Earnings | 200,000 | ||
Total Assets | $ | 670,000 | Total Liabilities & Equities | $ | 670,000 | |
Pert's preferred stock is $100 par value, and its common stock is $10 par value. The preferred dividends are cumulative and are two years in arrears on January 1, 20X5. Pert reports net income of $34,000 for 20X5 and pays no dividends. |
Required: | |||
a. | Present the worksheet consolidation entries needed to prepare a consolidated balance sheet on January 1, 20X5. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) record the basic consolidation entry.
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