Note: Graph for Entires is provided but is Blank, please provide all elimination entires, and the "picture" pages that follow below:
On January 1, 20X5, Pond Corporation purchased 75 percent of Skate Company's stock at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 25 percent of Skate's book value. The balance sheets for Pond and Skate at January 1, 20X8, and December 31, 20X8, and income statements for 20X8 were reported as follows:
P8-26A Intercorporate Bond Holdings and Other Transfers Cost Accumulated Depreciation Book Value Sale Price Gain/Loss Is this an UPSTREAM or DOWNSTREAM transaction? What is the balance of Equipment on 1/1/X8? What should the balance of Equipment be on 1/1/X8? What is the balance of Accum, Dep. on 1/1/X8? What should the balance of Accumulated Depreciation be on 1/1/X8? What is the book value of the Equipment on 1/1/X8? What was the original useful life of the Equipment? What is the rema hing useful life of the Equipment on the date of the intercompany asset transfer? What is the amount of the gain or loss on the transaction as of the date of the intercompany transfer? asset transfer? What was the amount of annual depreciation expense taken before the intercompany What is the amount of annual depreciation expense taken after the intercompany asset transfer? Cost Sale price Gain/Loss Is this an UPSTREAM or DOWNSTREAM transaction? Was there a gain or loss on the intercompany asset transfer? If so, what was the amount of gain or loss?Is this an UPSTREAM or What is the value of the intercompany DOWNSTREAM transaction? bond investment on the date of the intercompany debt transfer? Is this a DIRECT or an INDIRECT transfer of debt? Was the bond investment purchased at par, a premium or a discount? What is the face value (par value) of the intercompany bond liability on the If purchased at a premium or a discount, date of the intercompany debt transfer? what was the balance of the premium or discount on the date of the Was the bond issued at par, a premium intercompany debt transfer? or a discount? If purchased at a premium or a discount, If issued at a premium or a discount, what is the amount of amortization each what was the balance of the premium year? or discount on the date of the intercompany debt transfer? What was the balance of the bond investment on 12/31/20x8? If issued at a premium or a discount, what is the amount of amortization each What is the amount of intercompany year? Interest expense: If issued at a premium or a discount, What is the amount of intercompany what was the balance of the premium or interest income: discount on 12/31/20x8? What is the amount of intercompany What is the intercompany net bond interest income/expense adjustment liability on the date of the intercompany needed: debt transfer? What is the amount of the constructive gain/loss on the transaction, if any:20X8 Balance Sheets Pond Corporation Skate Company January 1 December 31 January 1 December 31 Cash 57,600 $ 53,100 $ 10,000 $ 47,000 Accounts Receivable 130,000 176,000 60,000 65,000 Interest & Other Receivables 40,000 45,000 8,000 10,000 Inventory 100,000 140,000 50,000 50,000 Land 50,000 50,000 22,000 22,000 Buildings and Equipment 400,000 400,000 240,000 240,000 Accumulated Depreciation (150,000) (185,000) (70,000) (94,000) Investment in Skate Company: Stock 122,100 139,050 Bonds 42,800 42,400 Investment in Tin Co. Bonds 135,000 134,000 Total Assets $ 927,500 $ 994,550 320,000 $ 340,000 Accounts Payable $ 60,000 65,000 $ 16,500 $ 11,000 Interest & Other Payables 40,000 45,000 7,000 12,000 Bonds Payable 300,000 300,000 100,000 100,000 Bond Discount (3,500) (3,000) Common Stock 150,000 150,000 30,000 30,000 Additional Paid-In Capital 155,000 155,000 20,000 20,000 Retained Earnings 222,500 279,550 150,000 170,000 Total Liabilities & Equities $ 927,500 $ 994,550 $ 320,000 $ 340,000 20X8 Income Statements Pond Corporation Skate Company Sales 450,000 $ 250,000 Income from Skate Co. 24,450 interest Income 18,500 Total Revenue $ 492,950 $ 250,000 Cost of Goods Sold $ 285,000 136,000 Other Operating Expenses 50,000 40,000 Depreciation Expense 35,000 24,000 Interest Expense 24,000 10,500 Miscellaneous Expense S 11,900 405,900 9,500 $ 220,000 Net Income 87,050 30,000 Additional Information
