Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Plug Products owns 80 percent of the stock of Spack Filter Company, which it acquired at underlying book value on August 30, 20X6. At that

image text in transcribed
image text in transcribed
image text in transcribed
Plug Products owns 80 percent of the stock of Spack Filter Company, which it acquired at underlying book value on August 30, 20X6. At that date, the fair value of the noncontrolling Interest was equal to 20 percent of the book value of Spark Filter Summarized trial balance data for the two companies as of December 31, 20x8, are as follows: Plus Products Spark Tilter Company Debit Credit Debit Credit Cash and Accounts Receivable $ 158,000 $106,000 Inventory 236,000 114.000 Buildings & Equipment (net) 205.000 180.000 Investment in Spark Filter Company 258, 509 Cont of Goods Sold 170,000 135.000 Depreciation Expense 40,000 30,000 Current Liabilities S198,113 $ 62,933 Common Stock 192,000 26.000 Retained Earnings 460,000 218,000 Sales 258,087 208,087 Income from Spark Filter Company 39,409 Total $1,147,609 $1,147,609 5565.000 5565,000 On January 1, 20X8. Plug's inventory contained filters purchased for $66,000 from Spark Filter, which had produced the filters for $46,000. In 20x8, Spark Filter spent $106,000 to produce additional filters, which it sold to Plug for $152.087 By December 31, 20X8. Plug had sold all filters that had been on hand January 1, 20x8, but continued to hold in inventory 545.626 of the 20x8 purchase from Spark Filter Required: a. Prepare all consolidation entries needed to complete a consolidation worksheet for 20x8. (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 B Record the basic consolidation entry. Note: Enter debits before credits Debit Credit Entry 1 Accounts Common stock Retained earnings income from Spark Filter Company NC in NI of Spark Filter Investment in Spark Filter Company NCI in NA of Spark Filter 218,000 39,409 274,609 Record entry Clear entry view consolidation entries b. Compute consolidated net income and income assigned to the controlling Interest in the 20x8 consolidated income statement Consolidated not income Income assigned to the controlling interest c Compute the balance assigned to the noncontrolling interest in the consolidated balance sheet as of December 31, 20x8 Mobiiling interest

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 1-27

Authors: James A. Heintz, Robert W. Parry

21st Edition

1285055411, 9781285055411

More Books

Students also viewed these Accounting questions