Equity Method Entries on Private Corp.'s Books: Investment in Secret Co. Cash Record the initial investment in Secret Co. Book Value Calculations: NCI 40% Book value at acquisition 22,800 6/10/X8 49,200 49,200 Solution to Exercises + Private Corp. 60% 34,200 = Common Stock 20,000 + Retained Earnings 37,000 Goodwill = 0 Identifiable Excess = 15,000 60% Book value = 34,200 Basic consolidation entry $49,200 Initial investment in Secret Corp. Common Stock Retained Earnings Investment in Secret Co. NCI in NA of Secret Co. Excess Value (Differential) Calculations: NCI Private Corp. 60% 15,000 Buildings & Equipment 20,000 37,000 34,200 22,800 40% Beginning balances 10,000 + = Inventory 5,000 + Excess Value (Differential) Reclassification Entry: 5,000 20,000 Inventory Buildings & Equipment 1 20,000 15,000 10,000