On January 1, 2013, Piper Company acquired an 80% interest in Sand Company for $2,271,100. At that time the common stock and retained earnings of Sand Company were $1,821,100 and $730,500, respectively. Differences between the fair value and the book value of the identifiable assets of Sand Company were as follows: Fair Value in Excess of Book Value Inventory $44,800 Equipment (net) 48,400 The book values of all other assets and liabilities of Sand Company were equal to their fair values on January 1, 2013. The equipment had a remaining useful life of eight years. Inventory is accounted for on a FIFO basis. Sand Company's reported net income and declared dividends for 2013 through 2015 are shown here: 2013 2014 2015 Net Income $99,800 $146,800 $78,700 Dividends 20,900 29,700 15,700 Assume the use of the complete equity method. (If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2013 Equity in Subsidiary Income Dividends Declared - Subsidiary Company Investment in Subsidiary (To eliminate intercompany dividends and income) Common Stock 1,821,100 Retained Earnings 730,500 Difference between Implied and Book Value 287275 Investment in Subsidiary 2,271,100 Noncontrolling Interest 567775 (To eliminate the investment account) Cost of Goods Sold 44,800 Equipment 42350 Depreciation Expense 6050 Goodwill 194075 Difference between Implied and Book Value 287275 (To allocate and depreciate the difference between implied and book value) 2014 Equity in Subsidiary Income Investment in Subsidiary Dividends Declared - Subsidiary Company (To eliminate intercompany dividends and income) Common Stock 1,821,100 Retained Earnings Difference between Implied and Book Value 287275 Investment in Subsidiary Noncontrolling Interest ULLA (To eliminate investment account and create noncontrolling interest account) Investment in Subsidiary TI Noncontrolling Interest Depreciation Expense 6050 Equipment 36300 Goodwill 194075 Difference between Implied and Book Value 287275 (To allocate and depreciate the difference between implied and book value) 2015 Equity in Subsidiary Income Investment in Subsidiary Dividends Declared - Subsidiary Company (To eliminate intercompany dividends and income) Common Stock 1,821,100 Retained Earnings Difference between Implied and Book Value Investment in Subsidiary Noncontrolling Interest (To eliminate investment account and create noncontrolling interest account) Investment in Subsidiary 11.IN Noncontrolling Interest Depreciation Expense 6050 Equipment 30250 Goodwill 194075 Difference between Implied and Book Value 287275 (To allocate and depreciate the difference between implied and book value)
