On May 1, 2015, Peters Company purchased 80% of the common stock of Smith Company for $50,400. Additional data concerning these two companies for the years 2015 and 2016 are: 2015 Common stock Other contributed capital Retained earnings, 1/1 Net income (loss) Cash dividends (11/30) Peters $ 107,800 36,900 86,300 68,400 16,500 Smith $24,200 9,600 10,500 44,100 2,200 2016 Peters Smith $107,800 $24,200 36,900 9,600 138,200 52,400 40,100 (5,300 ) 4,500 -0- Any difference between book value and the value implied by the purchase price relates to Smith Company's land. Peters Company uses the cost method to record its investment. Prepare the workpaper entries that would be made on a consolidated statements workpaper for the years ended December 31, 2015 and 2016 for Peters Company and its subsidiary, assuming that Smith Company's income is earned evenly throughout the year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit 2015 (To record dividend income) (To eliminate investment in subsidiary and create noncontrolling interest) (To eliminate excess of the book value of equity acquired.) 2016 (To establish reciprocity) (To eliminate investment in subsidiary and create noncontrolling interest) On May 1, 2015, Peters Company purchased 80% of the common stock of Smith Company for $50,400. Additional data concerning these two companies for the years 2015 and 2016 are: 2015 Common stock Other contributed capital Retained earnings, 1/1 Net income (loss) Cash dividends (11/30) Peters $ 107,800 36,900 86,300 68,400 16,500 Smith $24,200 9,600 10,500 44,100 2,200 2016 Peters Smith $107,800 $24,200 36,900 9,600 138,200 52,400 40,100 (5,300 ) 4,500 -0- Any difference between book value and the value implied by the purchase price relates to Smith Company's land. Peters Company uses the cost method to record its investment. Prepare the workpaper entries that would be made on a consolidated statements workpaper for the years ended December 31, 2015 and 2016 for Peters Company and its subsidiary, assuming that Smith Company's income is earned evenly throughout the year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit 2015 (To record dividend income) (To eliminate investment in subsidiary and create noncontrolling interest) (To eliminate excess of the book value of equity acquired.) 2016 (To establish reciprocity) (To eliminate investment in subsidiary and create noncontrolling interest)
