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Greetings, I need help on this consolidation excercise. Consolidation Problem: (100 points On January 1, 2017, Highe Company purchased 90% of the outstanding common stock
Greetings, I need help on this consolidation excercise.
Consolidation Problem: (100 points On January 1, 2017, Highe Company purchased 90% of the outstanding common stock of Lowe Compnay for $180,000. At that time, Lowe's stockholders' equity consisted of common stock, S1 paid-in capital, $20,000; and retained earnings, $25,000. Assume that any difference between book value of equity and the value implied by the purchase price is attributable to Land. Hi method to account for its investment. On December 31, 2017, the two companies' trial balances were as follows: 20,000; additi ghe uses the equity December 31, 2017 Cash Accounts Receivable Inventory Investment in Lowe Company Plant and Equipment Land Dividends Declared Cost of Goods Sold Operating Expenses Highe Lowe 65,000 $35,000 30,000 25,000 15,000 40,000 184,500 110,000 85,000 48,500 45,000 15,000 50,000 60,000 35,00015,000 $678,000 $300,000 20,000 Total Debits Accounts Payable Other Liabilities Common Stock, par value $10 Additional Paid-in Capital Retained Earnings 1/1 Sales Equity in Subsidiary Income $20,000 $15,000 15,000 25,000 200,000 120,000 70,000 20,000 55,000 25,000 300,000 95,000 18,000 Total Credits $678,000 $300,000 Required: 1. 2. Prepare a consolidated statements worksheet on December 31, 2017 Prepare a consolidated statements worksheet on December 31, 2018, assuming trial balances for Highe and Lowe on that date wereStep by Step Solution
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