P10-27 Consolidation Involving a Midyear Purchase LO 10-20 Princeton Products Corporation acquired 90 percent ownership of Stanford Company on October 20, 20X2, through an exchange of voting shares. Princeton Products issued 8,000 shares of its $10 par stock to acquire 27,000 shares of Stanford's $5 par stock. The market value of shares issued by Princeton Products was $247,500. At that date, the fair value of the noncontrolling interest was $27,500. Trial balances of the two companies on December 31, 20X2, are as follows: Stanford Company Debit Credit $ 50,000 60,000 100,000 340,000 Cash Accounts Receivable Inventory Buildings & Equipment Investment in Stanford Stock Cost of Goods Sold Depreciation Expense Other Expense Dividends Declared Accumulated Depreciation Accounts Payable Taxes Payable Bonds Payable Common Stock Additional Paid-In Capital Retained Earnings Sales Income from Stanford Co. Totals Princeton Products Corporation Debit Credit $ 85,000 100,000 150,000 400,000 252,000 305,000 25,000 14,000 40,000 $ 105,000 40,000 70,000 250,000 200,000 167,500 135,000 390,000 13,500 $1,371.000 $1,371,000 145,000 20,000 25,000 30,000 $ 65,000 50,000 55,000 100,000 150.000 100,000 250,000 $770,000 $770,000 For 20X2, before acquisition, Stanford reported sales of $205,000, cost of goods sold of $126,000, depreciation of $16,000, and other expenses of $18,000. Stanford paid dividends of $20,000 in April and $10,000 in November 20X2. Princeton Page 543 Products, which paid dividends of $40,000 in 20X2, uses the equity method in accounting for its investment in Stanford. Required a. Give all journal entries recorded by Princeton Products during 20X2 that relate to its investment in Stanford. b. Give the worksheet consolidation entries needed on December 31, 20X2, to prepare consolidated financial statements. c. Prepare a three-part consolidation worksheet as of December 31, 20X2. P10-27 Consolidation Involving a Midyear Purchase LO 10-20 Princeton Products Corporation acquired 90 percent ownership of Stanford Company on October 20, 20X2, through an exchange of voting shares. Princeton Products issued 8,000 shares of its $10 par stock to acquire 27,000 shares of Stanford's $5 par stock. The market value of shares issued by Princeton Products was $247,500. At that date, the fair value of the noncontrolling interest was $27,500. Trial balances of the two companies on December 31, 20X2, are as follows: Stanford Company Debit Credit $ 50,000 60,000 100,000 340,000 Cash Accounts Receivable Inventory Buildings & Equipment Investment in Stanford Stock Cost of Goods Sold Depreciation Expense Other Expense Dividends Declared Accumulated Depreciation Accounts Payable Taxes Payable Bonds Payable Common Stock Additional Paid-In Capital Retained Earnings Sales Income from Stanford Co. Totals Princeton Products Corporation Debit Credit $ 85,000 100,000 150,000 400,000 252,000 305,000 25,000 14,000 40,000 $ 105,000 40,000 70,000 250,000 200,000 167,500 135,000 390,000 13,500 $1,371.000 $1,371,000 145,000 20,000 25,000 30,000 $ 65,000 50,000 55,000 100,000 150.000 100,000 250,000 $770,000 $770,000 For 20X2, before acquisition, Stanford reported sales of $205,000, cost of goods sold of $126,000, depreciation of $16,000, and other expenses of $18,000. Stanford paid dividends of $20,000 in April and $10,000 in November 20X2. Princeton Page 543 Products, which paid dividends of $40,000 in 20X2, uses the equity method in accounting for its investment in Stanford. Required a. Give all journal entries recorded by Princeton Products during 20X2 that relate to its investment in Stanford. b. Give the worksheet consolidation entries needed on December 31, 20X2, to prepare consolidated financial statements. c. Prepare a three-part consolidation worksheet as of December 31, 20X2