Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 4 - 1 9 ( Static ) Wholly Owned Subsidiary with a Differential LO 4 - 3 Stick Corporation is a wholly owned subsidiary

Exercise 4-19(Static) Wholly Owned Subsidiary with a Differential LO 4-3
Stick Corporation is a wholly owned subsidiary of Point Corporation. Point acquired ownership of Stick on January 1,203, for $28,000 above Stick's reported net assets. At that date, Stick reported common stock outstanding of $60,000 and retained earnings of $90,000. The differential is assigned to equipment with an economic life of seven years at the date of the business combination. Stick reported net income of $30,000 and paid dividends of $12,000 in 203.
Required:
a. Prepare the journal entries recorded by Point Corporation during 203 on its books if Point accounts for its investment in Stick using the equity method.
b. Prepare the consolidating entries needed at December 31,203, to prepare consolidated financial statements.
Complete this question by entering your answers in the tabs below.
Prepare the consolidating entries needed at December 31,203, to prepare consolidated financial statements.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Journal entry worksheet
A B
C
Record the excess value (differential) reclassification entry.
Note: Enter debits before credits.
\table[[Event,Accounts,Debit,Credit],[3,,,],[,,,],[,,,]]
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: John Hoggett, Lew Edwards, Evelyn Hogg, John Medlin, Matthew Tilling

8th Edition

1742466362, 978-1742466361

More Books

Students also viewed these Accounting questions