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On january 1,2016, Puma Company acquired an 80% interest in Smalley Company for $3,600,000. On that date. Smalley Company had retained earnings of $800,000 and
On january 1,2016, Puma Company acquired an 80% interest in Smalley Company for $3,600,000. On that date. Smalley Company had retained earnings of $800,000 and common stock of $2,800,000. At the date of acquisition, 5malley 's Inventory had a Book Value of $50,000 and Fair Value of 85.000 : Smalley's Land had a Book Value of $300.000 and Fair Value of $660.000; and Smalley's Equipment had Book Value of $540,000 and Fair Value of $720,000. The equipment had an estimated remaining useful life of 8 years. One-half of the inventory was sold in 2016 and the remaining half was sold in 2017. Smalley Company reported net income of $240,000 in 2016 and $300,000 in 2017. No dividends were declared or paid in either year. Puma Company uses the Partial Equity Method to record its investment in Smalley Company. Required (19 points): Prepare in general journal form, the workpaper eliminating entries necessary in the consolidated statements workpaper for the year ending December 31, 2017. Identify debit or credit for every account in your entries. in addition, if an equity account of P or 5 is included in the eliminating entry. you must specify which companys equity account(s) you are referring to
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