Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2016, Aronsen Company acquired 80 percent of Sledel Company's outstanding shares. Sledel had a net book value on that date of $660,000:

image text in transcribed
On January 1, 2016, Aronsen Company acquired 80 percent of Sledel Company's outstanding shares. Sledel had a net book value on that date of $660,000: common stock ($10 par value) of $300,000 and retained earnings of $360,000 Aronsen paid $641,600 for this investment. The acquisition date fair value of the 20 percent noncontrolling interest was $160,400. The excess fair value over book value associated with the acquisition was used to increase land by $52,000 and to recognize copyrights (10-year remaining life) at $90.000. Subsequent to the acquisition, Aronsen applied the initial value method to its Investment account In the 2016-2017 period, the subsidiary's retained earnings increased by $260,000. During 2018, Sledel earned income of $96,000 while declaring $36,000 in dividends. Also, at the beginning of 2018, Siedel issued 2,000 new shares of common stock for $54 per share to finance the expansion of its corporate facilities. Aronsen purchased none of these additional shares and therefore recorded no entry Prepare the appropriate 2018 consolidation entries for these two companies. (If no entry is required for a transaction/event, select "No journal entry required" in the first account fleld.) Answer is complete but not entirely correct. No Transaction Accounts Credit 1 1 Investment in Siedel Retained earnings (Aronsen) Debit 193,920 193,920 2 2. Investment in Siedel Additional paid-in capital (Aronsen) 108,000 3 06 108.000 3 3 Common stock (Siedel) Additional paid in capital (Siedel) Retained earnings (Siedel) Investment in Siedel Noncontroling interest in Siedel OOOOO 300,0003 3.2003 256,800 3.200 126.400 O 4 Land Copyrights Investment in Siedel Noncontrolling interest in Siedel 52.000 90.000 99 500 42.500 5 5 Dividend income Dividends declared OOOOOO 00 36000 3 36.000 3 6 6 Amortization expense Copyrights 9,000 9,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

a. Describe the encounter. What made it intercultural?

Answered: 1 week ago