Question
On January 1, 2019, Parrot Company purchased 90% of the outstanding common stock of Sieger Company for $190,000. At that time, Sids stockhlders equity consisted
On January 1, 2019, Parrot Company purchased 90% of the outstanding common stock of Sieger Company for $190,000. At that time, Sids stockhlders equity consisted of common stock, $140,000; other contributed capital, $20,000; and retained earnings, $23,000.
Prepare a consolidated statements workpaper on 31 December 2019. Please use the Trial Balance given on the right side. Please complete all steps involved in the cost method (income statement, retained earnings, balance sheet) including preparation of statements, elimination entries and consolidation.
| USD ($) | Parrot | Sieger |
| Cash | 42,000 | 29,000 |
| Accounts receivable | 52,000 | 30,000 |
| Inventory | 30,000 | 18,000 |
| Investment in Sieger | 190,000 | 0 |
| Plant & equipment | 95,000 | 80,000 |
| Land | 39,000 | 34,000 |
| Dividends declared | 20,000 | 20,000 |
| Cost of goods sold | 130,000 | 40,000 |
| Operating exepense | 20,000 | 14,000 |
| Total debits | 618,000 | 265,000 |
| Accounts payable | 19,000 | 12,000 |
| Other liabilities | 10,000 | 20,000 |
| Common stock | 210,000 | 120,000 |
| Other contributed capital | 60,000 | 10,000 |
| Retained Earnings | 40,000 | 23,000 |
| Sales | 260,000 | 80,000 |
| Dividend Income | 19,000 | 0 |
| Total credits | 618,000 | 265,000 |
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Fundamental Cornerstones Of Managerial Accounting
Authors: Dan L. Heitger, Maryanne M. Mowen, Don R. Hansen
1st Edition
0324378068, 9780324378061
