**** I ONLY NEED HELP WITH WHAT IS IN RED*****
On January 1, 2014, Plate Company purchased a 90% interest in the common stock of Set Company for $600,610, an amount $20,200 in excess of the book value of equity acquired. The excess relates to the understatement of Set Company's land holdings. Excerpts from the consolidated retained earnings section of the consolidated statements workpaper for the year ended December 31, 2014, follow: Set Company Consolidated Balances 1/1/14 retained earnings 182,800 835,400 Net income from above 119,400 386,000 Dividends declared (53,900) (85,300) 12/31/14 retained earnings to the balance sheet 248,300 1,136,100 Set Company's stockholders' equity is composed of common stock and retained earnings only. Prepare the eliminating entries required for the preparation of a consolidated statements workpaper on December 31, 2014, assuming the use of the cost method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5,125.) Account Titles and Explanation Debit Credit Dividend Income 48510 Dividends Declared - Subsidiary Company 48510 (To record dividend income) Common Stock - Subsidiary Company 462100 Retained Earnings - Subsidiary Company 182,800 Difference between Implied and Book Value 22444 Investment in Subsidiary 600,610 Investment in Subsidiary 600,610 Noncontrolling Interest 66734 (To eliminate investment in subsidiary and create noncontrolling interest) Land 22444 Difference between Implied and Book Value 22444 (To eliminate excess of the book value of equity acquired.) Prepare the eliminating entries required for the preparation of a consolidated statements workpaper on December 31, 2014, assuming the use of the equity method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5,125.) Account Titles and Explanation Debit Credit Equity in Subsidiary Income 107460 Investment in Subsidiary 58950 Dividends Declared - Subsidiary Company 48510 (To record dividend income) Common Stock - Subsidiary Company Retained Earnings - Subsidiary Company 182,800 Difference between Implied and Book Value Investment in Subsidiary 600,610 Noncontrolling Interest (To eliminate investment in subsidiary and create noncontrolling interest) Land Difference between Implied and Book Value A (To eliminate excess of the book value of equity acquired.)
