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		$24,170		$38,479
Accounts receivable		32,700		53,790
Inventory		130,250		152,855
Investment in Shipley Company		213,170		0
Plant and equipment (net)		202,470		316,600
Land		128,750		265,788
Total		$731,510		$827,512
Accounts payable		$45,860		$107,160
Note payable		106,300		106,300
Noncontrolling interest in Shipley Company		0		34,702
Common stock		325,200		325,200
Other contributed capital		174,170		174,170
Retained earnings		79,980		79,980
Total		$731,510		$827,512

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

Common stock		$98,390
Other contributed capital		93,190
Retained earnings		50,450
Total		$242,030

(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