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)

	Your answer is correct.

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

SHOW LIST OF ACCOUNTS

LINK TO TEXT

Attempts: 4 of 5 used

(b)

	Your answer is partially correct. Try again.

Prepare Shipley Companys balance sheet as it appeared on December 31, 2013. (List assets in order of liquidity.)

SHIPLEY COMPANY Balance Sheet December 31, 2013For the Year Ended December 31, 2013For the Quarter Ended December 31, 2013
Assets
			$
			$
Liabilities and Stockholders' Equity
			$
			$

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: Cash Accounts receivable Inventory Investment in Shipley Company Plant and equipment (net) Land Total Price Company $23,140 36,350 123,490 216,430 174,540 110,290 Consolidated $40,992 52,500 151,399 -0- 331,390 223,723 $684,240 $800,004 Accounts payable Note payable Noncontrolling interest in Shipley Company Common stock Other contributed capital Retained earnings Total $42,480 99,100 -0- 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) Your answer is correct. 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 Common Stock 93130 Other Contributed Capital 92240 Retained Earnings 53100 Land 161541 Investment in Shipley 216430 Noncontrolling Interest 38194 SHOW LIST OF ACCOUNTS LINK TO TEXT Attempts: 4 of 5 used (b) Your answer is partially correct. Try again. Prepare Shipley Company's balance sheet as it appeared on December 31, 2013. (List assets in order of liquidity.) SHIPLEY COMPANY Balance Sheet December 31, 2013 Assets Cash Accounts Receivable 52500 Inventory 151399 x Plant and Equipment 3313901 Land Total Assets Liabilities and Stockholders' Equity Noncontrolling Interest X Common Stock Tother Contributed Capital Retained Earnings Total Liabilities and Stockholders' Equity SHOW LIST OF ACCOUNTS LINK TO TEXT