On January 1, 20X7, Porter Company purchased 80% of the common stock of Singer Company for $372,000. On this date Singer had total owners' equity of $440,000. (Calculate 80 % of $ 440,000 to determine the amount of goodwill for your D entry)

Any excess of cost over book value is due to goodwill. There will be NO A entry for this problem

During 20X7, 20X8, and 20X9, Porter has appropriately accounted for its investment in Singer using the simple equity method.

On January 1, 20X9, Porter held merchandise acquired from Singer for $40,000 (Beginning inventory). During 20X9, Singer sold merchandise to Porter for $120,000, of which $10,000 is held by Porter on December 31, 20X9 (Ending inventory). Singer's usual gross profit on affiliated sales is 40%.

On December 31, 20X9, Porter still owes Singer $5,000 for merchandise acquired in December.

On December 31, 20X7, Porter sold $100,000 par value of 10%, 10-year bonds for $102,000. Porter uses the straight-line method of amortization for the premium. The bonds pay interest semi-annually on June 30 and December 31.

On December 31, 20X8, Singer repurchased $50,000 par value of the bonds, paying $49,100. This is half of the face value of the bonds. Singer uses the straight-line method of amortization for the discount. The bonds are still held on December 31, 20X9.

Prepare the following elimination or adjusting entries DO NOT COMPLETE THE WORKSHEET. Use the worksheet for amounts that will help you with the entries.

Equity

Determination and distribution

Current year income

Current year dividend

Intercompany sales

Intercompany payables/ receivables

Beginning inventory

Ending inventory

Bond entries

	Porter	Singer
Account Titles	Company	Company
Inventory, December 31	120,000	60,000
Other Current Assets	375,800	365,800
Investment in Sub. Company	520,000
Investment in Parent Bonds		49,200[PD1]
Land	140,000	100,000
Buildings and Equipment	375,000	400,000
Accumulated Depreciation	(150,000)	(130,000)
Rent Receivable
Goodwill
Current Liabilities	(160,000)	(80,000)
Bonds Payable, 10%	(100,000)	[PD2]
Premium on Bonds Payable	(1,600)
Other Long-Term Liabilities	(200,000)	(140,000)
Common Stock--P Co.	(200,000)
Other Paid-in Capital--P Co.	(100,000)
Retained Earnings--P Co.	(479,200)
Common Stock--S Co.		(100,000)
Other Paid-in Capital--S Co.		(200,000)
Retained Earnings--S Co.		(250,000)
Net Sales	(590,000)	(520,000)
Cost of Goods Sold	355,000	310,000
Operating Expenses	115,200	115,100
Interest Income		(5,100[PD3] )
Interest Expense	9,800[PD4]
Subsidiary Income	(80,000)
Dividends Declared--P Co.	50,000
Dividends Declared--S Co.		25,000
Gain on Retirement of Bonds
Consolidated Net Income
To NCI
To Controlling Interest
Total NCI

[PD1]For the B entry

[PD2]Use half of the bonds payable and half of the premium for the B entry

[PD3]For the B entry

[PD4]Use half of this amount for the B entry