Exercise 3-6

On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The balance sheet of Price Company and the consolidated balance sheet on December 3, 2013, were as follows:

		Price Company		Consolidated
Cash		$23,140		$40,992
Accounts receivable		36,350		52,500
Inventory		123,490		151,399
Investment in Shipley Company		216,430		0
Plant and equipment (net)		174,540		331,390
Land		110,290		223,723
Total		$684,240		$800,004
Accounts payable		$42,480		$120,050
Note payable		99,100		99,100
Noncontrolling interest in Shipley Company		0		38,194
Common stock		295,900		295,900
Other contributed capital		179,490		179,490
Retained earnings		67,270		67,270
Total		$684,240		$800,004

On the date of acquisition, the stockholders equity section of Shipley Companys balance sheet was as follows:

Common stock		$93,130
Other contributed capital		92,240
Retained earnings		53,100
Total		$238,470

(a)

Prepare the investment elimination entry made to complete a consolidated balance sheet workpaper. Any difference between book value and the value implied by the purchase price relates to subsidiary land. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The balance sheet of Price Company and the consolidated balance sheet on December 3, 2013, were as follows: Cash Accounts receivable Inventory Investment in Shipley Company Plant and equipment (net) Price Company $23,140 36,350 123,490 216,430 174,540 110,290 $684,240 Consolidated $40,992 52,500 151,399 -0- 331,390 223,723 $800,004 Land Total Accounts payable Note payable Noncontrolling interest in Shipley Company Common stock Other contributed capital Retained earnings Total $42,480 99, 100 -O- 295,900 179,490 67,270 $684,240 $120,050 99,100 38,194 295,900 179,490 67,270 $800,004 On the date of acquisition, the stockholders' equity section of Shipley Company's balance sheet was as follows: Common stock Other contributed capital Retained earnings Total $93,130 92,240 53,100 $238,470 (a) (a Prepare the investment elimination entry made to complete a consolidated balance sheet workpaper. Any difference between book value and the value implied by the purchase price relates to subsidiary land. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit D SHOW LIST OF ACCOUNTS LINK TO TEXT