Platinum Corporation acquired 11,900 shares of the common stock and 700 shares of the 8 percent...

Transcribed Image Text:

Platinum Corporation acquired 11,900 shares of the common stock and 700 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 $ 31,000 81,000 Bonds Payable 128,000 Accounts Payable Preferred Stock Buildings & Equipment Less: Accumulated Depreciation Total Assets 609,000 (136,000) Common Stock Retained Earnings $ 713,000 Total Liabilities & Equities $ 81,000 97,000 175,000 170,000 190,000 $713,000 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 $54,000 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.) No Event A 1 Preferred stock Common stock Answer is complete and correct. Accounts Debit Credit 175,000 170,000 190,000 232,400 81,200 Retained earnings Investment in Silver Company CS Investment in Silver Company PS NCI in NA of Silver Company 221,400 Platinum Corporation acquired 11,900 shares of the common stock and 700 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 $ 31,000 81,000 Bonds Payable 128,000 Accounts Payable Preferred Stock Buildings & Equipment Less: Accumulated Depreciation Total Assets 609,000 (136,000) Common Stock Retained Earnings $ 713,000 Total Liabilities & Equities $ 81,000 97,000 175,000 170,000 190,000 $713,000 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 $54,000 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.) No Event A 1 Preferred stock Common stock Answer is complete and correct. Accounts Debit Credit 175,000 170,000 190,000 232,400 81,200 Retained earnings Investment in Silver Company CS Investment in Silver Company PS NCI in NA of Silver Company 221,400