Price Corporation acquired 100 percent ownership of Saver Company on January 1, 20X8, for $173,000. At that date, the fair value of Saver's buildings and equipment was $38,000 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 $7,000. Trial balance data for Price and Saver on December 31, 20X8, are as follows: Price Corporation Saver Company Item Debit Credit Debit Credit Cash $ 24,000 $ 30,000 Accounts Receivable 79,000 16,500 Inventory 99,000 34,000 Land 39,000 24,000 Buildings & Equipment 331,000 159,000 Investment in Saver Company 154,700 Cost of Goods Sold 134,000 113,000 Wage Expense 74,500 31,500 Depreciation Expense 29,500 14,500 Interest Expense 16,500 8,500 Other Expenses 31,500 27,500 Dividends Declared 39,000 20,500 Accumulated Depreciation $ 149,500 $ 85,000 Accounts Payable 90,000 25,000 Wages Payable 26,000 13,500 Notes Payable 159,000 26,500 Common Stock 209,000 60,000 Retained Earnings 111,000 40,000 Sales 305,000 229,000 Income from Saver Company 2,200 $1,051,700 $1,051,700 $479,000 $479,000 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.) 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.) Answer is not complete. No Event Accounts Debit Credit A 1 Common stock Retained earnings Income from Saver Company Dividends declared Investment in Saver Company 60,000 40,000 34,000 20,500 113,500 B 2 3,800 Depreciation expense Goodwill impairment loss Income from Saver Company 13,500 x 15,100 X 3 Buildings and equipment Goodwill 7,000 > 3,800 Accumulated depreciation Investment in Saver Company D 4 Accumulated depreciation Buildings and equipment b. Prepare a three-part consolidation worksheet for 20X8. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) Consolidated $ 0 PRICE CORPORATION AND SUBSIDIART Consolidated Financial Statements Worksheet December 31, 20X8 Consolidation Entries Price Saver DR CR Corp. Co. Income Statement Sales Less: COGS Less: Wage expense Less: Depreciation expense Less: Interest expense Less: Other expenses Less: Impairment loss Income from Saver Co. Net Income $ 0 $ 0 $ 0 $ 0 Statement of Retained Earnings Beginning balance Net income Less: Dividends declared Ending Balance $ 0 $ 0 $ 0 $ 0 Assets Cash Accounts receivable Inventory Land Buildings & equipment Less: Accumulated depreciation Investment in Saver Co. Goodwill Total Assets $ 0 $ 0 $ 0 $ 0 Liabilities & Stockholders' Equity Accounts payable Wages payable Notes payable Common stock Retained earnings Total Liabilities & $ 0 $ 0 $ 0 $ 0 Equity $ 0 $ 0 $ 0
