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Exercise 4-6 On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of Sales Company for $352,500. On that date, Sales Company's
Exercise 4-6 On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of Sales Company for $352,500. On that date, Sales Company's stockholders' equity consisted of common stock, $100,400; other contributed capital, $40,500; and retained earnings, $143,800. Pert Company paid more than the book value of net assets acquired because the recorded cost of Sales Company's land was significantly less than its fair value. During 2014 Sales Company earned $153,600 and declared and paid a $50,300 dividend. Pert Company used the partial equity method to record its investment in Sales Company. Prepare the workpaper eliminating entries for a workpaper on December 31, 2014. (Credit account manually. If no entry is required, select "No Entry" for the account titles and enter 0 for ti Account Titles and Explanation Debit Credit X Equity Income 130560) Dividend Income 42755 Investment in Subsidiary (To record equity income (loss) and dividend income) Common Stock - Subsidiar 100400 Other Contributed Capital 40500 Retained Earnings - Subsic 143800 Difference between Implie 62118 T Investment in Subsidiai 352500 T Noncontrolling Interest 62118 (To eliminate investment in subsidiary and create noncontrolling interest) Tland | 62118 T Difference between Im 62118 (To eliminate excess of the book value of equity acquired.)
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