Platinum Corporation acquired 11,200 shares of the common stock and 500 shares of the 8 percent preferred stock of Silver Company on December 31, 20X4, at the book value of the underlying stock interests. At that date, the fair value of the noncontrolling interest in Silver's common stock was equal to 30 percent of the book value of its common stock interest. Silver reported the following balance sheet amounts on January 1, 20X5:
| | | | | | | | | |
| Cash | $ | 44,000 | | | Accounts Payable | $ | 161,000 | |
| Accounts Receivable | | 76,000 | | | Bonds Payable | | 98,000 | |
| Inventory | | 128,000 | | | Preferred Stock | | 125,000 | |
| Buildings & Equipment | | 618,000 | | | Common Stock | | 160,000 | |
| Less: Accumulated Depreciation | | (136,000 | ) | | Retained Earnings | | 186,000 | |
| Total Assets | $ | 730,000 | | | Total Liabilities & Equities | $ | 730,000 | |
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Silver's preferred stock is $100 par value, and its common stock is $10 par value. The preferred dividends are cumulative and are two years in arrears on January 1, 20X5. Silver reports net income of $51,000 for 20X5 and pays no dividends. Required: a. Present the worksheet consolidation entry needed to prepare a consolidated balance sheet on January 1, 20X5. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
b. Assuming that Platinum reported income from its separate operations of $90,000 in 20X5, compute the amount of consolidated net income and the amount of income to be assigned to the controlling shareholders in the 20X5 consolidated income statement.
Platinum Corporation acquired 11,200 shares of the common stock and 500 shares of the 8 percent preferred stock of Silver Company on December 31, 20X4, at the book value of the underlying stock Interests. At that date, the fair value of the noncontrolling Interest in Silver's common stock was equal to 30 percent of the book value of its common stock Interest. Silver reported the following balance sheet amounts on January 1, 20X5: Cash Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Total Assets $ 44,000 Accounts Payable 76,000 Bonds Payable 128.00 Preferred Stock 618, eee Connon Stock (136,688) Retained Earnings $ 730, eee Total Liabilities & Equities $161, eee 98,eee 125,000 160,000 186,000 $ 730, eee Silver's preferred stock is $100 par value, and its common stock is $10 par value. The preferred dividends are cumulative and are two years in arrears on January 1, 20X5. Silver reports net Income of $51,000 for 20x5 and pays no dividends. Required: a. Present the worksheet consolidation entry needed to prepare a consolidated balance sheet on January 1, 20X5. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list Consolidation Worksheet Entries . Record the basic consolidation entry Note: Enter debits before credits Event Accounts Credit 1 Preferred stock Common stock Debit 125.000 160,000 A Record the basic consolidation entry. Note: Enter debits before credits Event Credit 1 Accounts Preferred stock Common stock Retained earings Investment in Silver Company CS Investment in Silver Company PS NCI in NA of Silver Company Debit 125,000 180,000 186,000 Record entry Clear entry view consolidation entries b. Assuming that Platinum reported Income from its separate operations of $90.000 in 2005, compute the amount of consolidated net Income and the amount of income to be assigned to the controling shareholders in the 20x5 consolidated Income statement Consolidated net income Income to controlling interest Platinum Corporation acquired 11,200 shares of the common stock and 500 shares of the 8 percent preferred stock of Silver Company on December 31, 20X4, at the book value of the underlying stock Interests. At that date, the fair value of the noncontrolling Interest in Silver's common stock was equal to 30 percent of the book value of its common stock Interest. Silver reported the following balance sheet amounts on January 1, 20X5: Cash Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Total Assets $ 44,000 Accounts Payable 76,000 Bonds Payable 128.00 Preferred Stock 618, eee Connon Stock (136,688) Retained Earnings $ 730, eee Total Liabilities & Equities $161, eee 98,eee 125,000 160,000 186,000 $ 730, eee Silver's preferred stock is $100 par value, and its common stock is $10 par value. The preferred dividends are cumulative and are two years in arrears on January 1, 20X5. Silver reports net Income of $51,000 for 20x5 and pays no dividends. Required: a. Present the worksheet consolidation entry needed to prepare a consolidated balance sheet on January 1, 20X5. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list Consolidation Worksheet Entries . Record the basic consolidation entry Note: Enter debits before credits Event Accounts Credit 1 Preferred stock Common stock Debit 125.000 160,000 A Record the basic consolidation entry. Note: Enter debits before credits Event Credit 1 Accounts Preferred stock Common stock Retained earings Investment in Silver Company CS Investment in Silver Company PS NCI in NA of Silver Company Debit 125,000 180,000 186,000 Record entry Clear entry view consolidation entries b. Assuming that Platinum reported Income from its separate operations of $90.000 in 2005, compute the amount of consolidated net Income and the amount of income to be assigned to the controling shareholders in the 20x5 consolidated Income statement Consolidated net income Income to controlling interest
