Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On January 1, 2009, Pert Company purchased 85% of the outstanding common stock of Sales Company for $350,000. On that date, Sales Company's stockholders' equity
On January 1, 2009, Pert Company purchased 85% of the outstanding common stock of Sales Company for $350,000. On that date, Sales Company's stockholders' equity consisted of common stock, $100,000; other contributed capital, $40,000; and retained earnings $140,000. Pert Company paid more than the book value of net assets acquired because the recorded cost of Sales Company's land was significantly less than it's fair value. During 2009 Sales Company earned $148,000 and declared and paid a $50,000 dividend. Pert Company used the partial equity method to record its investment in Sales Company. Required: A. Prepare the investment entries on Pert Company's books for 2009. B. Prepare the workpaper eliminating entries for a workpaper on December 31, 2009
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started