Question
I need help with the journal entries for 2017/2018 more than anything please. Herbert, Inc. acquired all of Rambis Companys outstanding stock on January 1,
I need help with the journal entries for 2017/2018 more than anything please.
Herbert, Inc. acquired all of Rambis Companys outstanding stock on January 1, 2017 for $ 574,000 in cash. Annual excess amortization of $ 12,000 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $ 400,000, and Rambis reported a $ 200,000 balance. Herbert reported internal income of $ 40,000 in 2017 and $ 50,000 in 2018 and paid $ 10,000 in dividends each year. Rambis reported net income of $ 20,000 in 2017 and $ 30,000 in 2018 and paid $ 5,000 in dividends each year.
Assume that Herberts internal income figures above do not include any income from the subsidiary. The parent uses the equity method.
2017 journal entries for Herbert Inc. | |||||||||
| To record the acquistion transaction |
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1/1/17 | Investment in Rambis Company |
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| ??? | ||
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| Cash |
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| ??? |
| To record receipt of dividend |
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12/31/17 | Cash |
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| Investment in Rambis Company |
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| ??? | ||
| To accrue the subsidiary income |
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12/31/17 | Investment in Rambis Company |
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| ??? | ||
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| Equity in Subsidiary Earnings |
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| ??? | ||
| To recognize amortization on allocations |
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12/31/17 | Equity in Subsidiary Earnings |
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| Investment in Rambis Company |
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| ??? |
2018 journal entries for Herbert Inc. | |||||||||
| To record receipt of dividend |
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12/31/18 | Cash |
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| ?????? |
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| Investment in Rambis Company |
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| ????? | ||
| To accrue the subsidiary income |
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12/31/18 | Investment in Rambis Company |
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| ?????? | ||
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| Equity in Subsidiary Earnings |
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| ?????? | ||
| To recognize amortization on allocations |
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12/31/18 | Equity in Subsidiary Earnings |
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| ????? | ||
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| Investment in Rambis Company |
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| ????? |
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