Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Paque Corporation owns 90% of the common stock of Segal Company. The stock was purchased for $810,000 on January 1, 2009, when Segal Companys retained

Paque Corporation owns 90% of the common stock of Segal Company. The stock was purchased for $810,000 on January 1, 2009, when Segal Companys retained earnings were $150,000. Financial data for 2013 are presented here: Paque Corporation Segal Company Sales $1,650,000 $795,000 Equity in Subsidiary Income 91,125 Total Revenue 1,741,125 795,000 Cost of Goods Sold: Beginning Inventory 225,000 165,000 Purchases 1,275,000 525,000 Cost of Goods Available 1,500,000 690,000 Less: Ending Inventory 210,000 172,500 Cost of Goods Sold 1,290,000 517,500 Other Expenses 310,500 206,250 Total Cost and Expense 1,600,500 723,500 Net Income 140,625 71,250 1/1 Retained Earnings 798,000 180,000 Net Income 140,625 71,250 Dividends Declared (150,000) (60,000) 12/31 Retained Earnings 788,625 191,250 Cash 93,000 75,000 Accounts Receivable 319,500 168,750 Inventory 210,000 172,500 Investment in Segal Company 833,625 Other Assets 750,000 630,000 Total Assets 2,206,125 1,046,250 Accounts Payable 105,000 45,000 Other Current Liabilities 112,500 60,000 Capital Stock 1,200,000 750,000 Retained Earnings 788,625 191,250 Total Liabilities and Equity 2,206,125 1,046,250 The January 1, 2013, inventory of Paque Corporation includes $45,000 of profit recorded by Segal Company on 2012 sales. During 2013, Segal Company made intercompany sales of $300,000 with a markup of 20% of selling price. The ending inventory of Paque Corporation includes good purchased in 2013 from Segal Company for $75,000. Paque Corporation used the complete equity method to records its investment in Segal Company. A. Prepare the consolidated statements workpaper for the year ended December 31, 2013. B. Calculate consolidated retained earnings on December 31, 2013, using the analytical or t-account approach

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting Chapters 1- 15

Authors: James A Heintz, Robert W Parry

23rd Edition

1337794767, 9781337794763

More Books

Students also viewed these Accounting questions

Question

1. Build trust and share information with others.

Answered: 1 week ago