Question
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $138,000. At that date, the fair value of Saver's buildings
Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $138,000. At that date, the fair value of Saver's buildings and equipment was $24,000 more than the book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Price's management concluded at December 31, 20X8, that goodwill involved in its acquisition of Saver shares had been impaired and the correct carrying value was $3,500. Trial balance data for Price and Saver on December 31, 20X8, are as follows: Price Corporation Debit Credit Item Cash Credit $ 20,500 Saver Company Debit $ 23,000 Accounts Receivable. 72,000 13,000 Inventory 92,000 27,000 Land 32,000 17,000 Buildings & Equipment 352,000 152,000 Investment in Saver Company 128,100 Cost of Goods Sold: 127,000 112,000 Wage Expense. 43,000 28,000 Depreciation Expense 26,000 11,000 Interest Expense 13,000 5,000 Other Expenses Dividends Declared: Accumulated Depreciation Accounts Payable 17,500 10,000 32,000 17,000 $146,000 $ 50,000 55,000 18,000 Wages Payable Notes Payable Common Stock 19,000 10,000 152,000 51,000 202,000 60,000 Retained Earnings 104,000 40,000 4 Sales Income from Saver Company 270,000 186,000 7,100 $955,100 $955,100 $415,000 $415,000 Required: a. Prepare the following consolidating entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.).
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