Exercise 5-11 On January 1, 2013, Piper Company acquired an 80% interest in Sand Company for $2,302,200. At that time the common stock and retained earnings of Sand Company were $1,885,700 and $671,800, respectively. Differences between the fair value and the book value of the identifiable assets of Sand Company were as follows: Fair Value in Excess of Book Value Inventory $44,800 50,600 Equipment (net) The book values of all other assets and liabilities of Sand Company were equal to their fair values on January 1, 2013. The equipment had a remaining useful life of eight years. Inventory is accounted for on a FIFO basis. Sand Company's reported net income and declared dividends for 2013 through 2015 are shown here: Net Income Dividends 2013 $96,500 20,400 2014 $154,000 30,500 2015 $81,400 15,000 Prepare the eliminating/adjusting entries needed on the consolidated worksheet for the years ended 2013, 2014, and 2015. CALCULATOR PRINTER VERSION BACK NEXT Date Account Titles and Explanation Debit Credit 2013 Dividend Income 16,320 16,320 Dividends Declared - Subsidiary Company (To eliminate intercompany dividends) Common Stock 1,885,700 Retained Earnings 671,800 Difference between Implied and Book Value 320,250 Investment in Subsidiary 2,302,200 Noncontrolling Interest 575,550 (To eliminate the investment account) Equipment 50,600 Land Inventory 44,800 Goodwill Difference between Implied and Book Value (To allocate and depreciate the difference between implied and book value) (To eliminate investment account and create noncontrolling interest account) (To allocate and depreciate the difference between implied and book value) Exercise 5-11 On January 1, 2013, Piper Company acquired an 80% interest in Sand Company for $2,302,200. At that time the common stock and retained earnings of Sand Company were $1,885,700 and $671,800, respectively. Differences between the fair value and the book value of the identifiable assets of Sand Company were as follows: Fair Value in Excess of Book Value Inventory $44,800 50,600 Equipment (net) The book values of all other assets and liabilities of Sand Company were equal to their fair values on January 1, 2013. The equipment had a remaining useful life of eight years. Inventory is accounted for on a FIFO basis. Sand Company's reported net income and declared dividends for 2013 through 2015 are shown here: Net Income Dividends 2013 $96,500 20,400 2014 $154,000 30,500 2015 $81,400 15,000 Prepare the eliminating/adjusting entries needed on the consolidated worksheet for the years ended 2013, 2014, and 2015. CALCULATOR PRINTER VERSION BACK NEXT Date Account Titles and Explanation Debit Credit 2013 Dividend Income 16,320 16,320 Dividends Declared - Subsidiary Company (To eliminate intercompany dividends) Common Stock 1,885,700 Retained Earnings 671,800 Difference between Implied and Book Value 320,250 Investment in Subsidiary 2,302,200 Noncontrolling Interest 575,550 (To eliminate the investment account) Equipment 50,600 Land Inventory 44,800 Goodwill Difference between Implied and Book Value (To allocate and depreciate the difference between implied and book value) (To eliminate investment account and create noncontrolling interest account) (To allocate and depreciate the difference between implied and book value)