Exercise 4-5 - Assessment Activity - Week6 - ACC/545 - eCampus

• • Ineedhelpwiththispartoftheassignment:
  • Determine the total noncontrolling interest that will be reported on the consolidated balance sheet on December 31, 2014. How does the noncontrolling interest differ between the cost method and the equity method?

  • EXERCISE4-5EliminatingEntries,NoncontrollingInterestLO

    OnJanuary1,2014,PlateCompanypurchaseda90%interestinthecommonstockofSetCompanyfor$650,000,anamount$20,000inexcessofthebookvalueofequityacquired.TheexcessrelatestotheunderstatementofSetCompany'slandholdings.

    ExcerptsfromtheconsolidatedretainedearningssectionoftheconsolidatedstatementsworkpaperfortheyearendedDecember31,2014,follow:

    	SetCompany	ConsolidatedBalances
    1/1/14retainedearnings	190,000	880,000
    Netincomefromabove	132,000	420,000
    Dividendsdeclared	(50,000)	(88,000)
    12/31/14retainedearningstothebalancesheet	272,000	1,212,000

    SetCompany'sstockholders'equityiscomposedofcommonstockandretainedearningsonly. Required:
    • PreparetheeliminatingentriesrequiredforthepreparationofaconsolidatedstatementsworkpaperonDecember31,2014,assumingtheuseofthecostmethod.
    • PreparetheeliminatingentriesrequiredforthepreparationofaconsolidatedstatementsworkpaperonDecember31,2014,assumingtheuseoftheequitymethod.
    • DeterminethetotalnoncontrollinginterestthatwillbereportedontheconsolidatedbalancesheetonDecember31,2014.Howdoesthenoncontrollinginterestdifferbetweenthecostmethodandtheequitymethod?

    DeterminethetotalnoncontrollinginterestthatwillbereportedontheconsolidatedbalancesheetonDecember31,2014.Howdoesthenoncontrollinginterestdifferbetweenthecostmethodandtheequitymethod?