Question
Public Company acquired 85% of the common stock of Sample Company on January 1st, Year One, for $510,000 On that date, Sample had the following
Public Company acquired 85% of the common stock of Sample Company on January 1st, Year One, for $510,000
On that date, Sample had the following trial balance:
Account Debit Credit
Additional paid in capital 100,000
Building(12 year life) 250,000
Common Stock 170,000
Current assets 170,000
Equipment(6 yr life) 160,000
Land 110,000
Liabilities(due in 4 yrs) 300,000
Retained earnings 1/year 1 120,000
Totals $690,000 $690,000
During year one, Sample reported net income of $60,000
During year one, Sample paid dividends of $30,000
During year two, Sample reported net income of $80,000
During year two, Sample paid dividends of $40,000
On January 1, year one, fair values were:
Land $146,000
Building 274,000
Equipment 196,000
There was no impairment of any goodwill arising from he acquisition.
Use the data for the Public Company acquisition of the Sample Company to prepare the consolidation worksheet entries for December 31 of year one.
For clarity use the entry labels S, A, I and so on.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started