Kennelly Corporation acquired all of Short Companys common shares on January 1, 20X5, for $180,000 On that date, the book value of the net assets reported by Short was $150,000 The entire differential was assigned to depreciable assets with a six year remaining economic life from January 1, 20X5 The adjusted trial balances for the two companies on December 31, 20X5, are as follows Kennelly Corporation Short Company Item Debit Credit Debit Credit Cash $ 15,000 $ 5,000 Accounts Receivable 30,000 40,000 Inventory 70,000 60,000 Depreciable Assets (net) 325,000 225,000 Investment in Short Company Stock 195,000 Depreciation Expense 25,000 15,000 Other Expenses 105,000 75,000 Dividends Declared 40,000 10,000 Accounts Payable $ 50,000 $ 40,000 Notes Payable 100,000 120,000 Common Stock 200,000 100,000 Retained Earnings 230,000 50,000 Sales 200,000 120,000 Income from Subsidiary 25,000 $ 805,000 $ 805,000 $ 430,000 $ 430,000 Kennelly uses the equity method in accounting for its investment in Short Short declared and paid dividends on December 31, 20X5 Required a Prepare the consolidation entries needed as of December 31, 20X5, to complete a consolidation worksheet (If no entry is required for a transaction event, select No journal entry required in the first account field ) Consolidation Worksheet Entries Record the basic consolidation entry Record the amortized excess value reclassification entry Record the excess value (differential) reclassification entry Entry Accounts Debit Credit 1 Enter debits before credits b Prepare a three part consolidation worksheet as of December 31, 20X5 (Values in the first two columns (the parent and subsidiary balances) that are to be deducted should be indicated with a minus sign, while all values in the Consolidation Entries columns should be entered as positive values For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet )

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Kennelly Corporation acquired all of Short Companys common shares on January 1, 20X5, for $180,000. On that date, the book value of the net assets

Kennelly Corporation acquired all of Short Companys common shares on January 1, 20X5, for $180,000. On that date, the book value of the net assets reported by Short was $150,000. The entire differential was assigned to depreciable assets with a six-year remaining economic life from January 1, 20X5.

The adjusted trial balances for the two companies on December 31, 20X5, are as follows:

		Kennelly Corporation						Short Company

Item	Debit			Credit			Debit			Credit
Cash		$	15,000					$	5,000
Accounts Receivable			30,000						40,000
Inventory			70,000						60,000
Depreciable Assets (net)			325,000						225,000
Investment in Short Company Stock			195,000
Depreciation Expense			25,000						15,000
Other Expenses			105,000						75,000
Dividends Declared			40,000						10,000
Accounts Payable					$	50,000					$	40,000
Notes Payable						100,000						120,000
Common Stock						200,000						100,000
Retained Earnings						230,000						50,000
Sales						200,000						120,000
Income from Subsidiary						25,000

		$	805,000		$	805,000		$	430,000		$	430,000

Kennelly uses the equity method in accounting for its investment in Short. Short declared and paid dividends on December 31, 20X5.

Required:

Prepare the consolidation entries needed as of December 31, 20X5, to complete a consolidation worksheet. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Consolidation Worksheet Entries

Record the basic consolidation entry.

Record the amortized excess value reclassification entry.

Record the excess value (differential) reclassification entry.

Entry

Accounts

Debit

Credit

1

*Enter debits before credits

Prepare a three-part consolidation worksheet as of December 31, 20X5. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)