Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pole Manufacturing Corporation issued stock with a par value of $67,000 and a market value of $503,500 to acquire 95 percent of Spencer Corporation's common

image text in transcribedimage text in transcribed

Pole Manufacturing Corporation issued stock with a par value of $67,000 and a market value of $503,500 to acquire 95 percent of Spencer Corporation's common stock on August 30, 20X1. At that date, the fair value of the noncontrolling interest was $26,500. On January 1, 20x1, Spencer reported the following stockholders' equity balances: Common Stock ($10 par value) Additional Paid-In Capital Retained Earnings Total Stockholders' Equity $150,000 50,000 300,000 $500,000 Spencer reported net income of $60,000 in 20X1, earned uniformly throughout the year, and declared and paid dividends of $10,000 on June 30 and $25,000 on December 31, 20X1. Pole accounts for its investment in Spencer Corporation using the equity method. Pole reported retained earnings of $400,000 on January 1, 20X1, and had 20X1 income of $140,000 from its separate operations. Pole paid dividends of $80,000 on December 31, 20X1. Required: a. Compute consolidated retained earnings as of January 1, 20X1, as it would appear in comparative consolidated financial statements presented at the end of 20X1. Consolidated retained earnings b. Compute consolidated net income and income to the controlling interest for 20X1. (Do not round intermediate calculations.) Consolidated net income Income to controlling interest c. Compute consolidated retained earnings as of December 31, 20X1. Consolidated retained earnings d. Give the December 31, 20X1, balance of Pole Manufacturing's investment in Spencer Corporation. Balance in investment account

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_2

Step: 3

blur-text-image_3

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

Financial Accounting For Decision Makers

Authors: Peter Atrill

8th Edition

1292099046, 978-1292099040

More Books

Students also viewed these Accounting questions

Question

a. What is the purpose of the team?

Answered: 1 week ago

Question

* What is the importance of soil testing in civil engineering?

Answered: 1 week ago

Question

Explain the concept of shear force and bending moment in beams.

Answered: 1 week ago