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Stage Company operates on a calendar-year basis, reporting its results of operations quarterly. For the first quarter of 20X1, Stage reported sales of $248,000 and
Stage Company operates on a calendar-year basis, reporting its results of operations quarterly. For the first quarter of 20X1, Stage reported sales of $248,000 and operating expenses of $188,000 and paid dividends of $15,000. On April 1, 20X1, Parachute Theaters Inc. acquired 85 percent of Stage's common stock for $833,000. At that date, the fair value of the noncontrolling interest was $147,000, and Stage had 100,000 outstanding shares of $1 par common stock, originally issued at $6 per share. The differential is related to goodwill. On December 31, 20X1, the management of Parachute Theaters reviewed the amount attributed to goodwill as a result of its purchase of Stage common stock and concluded that goodwill was not impaired Stage's retained earnings statement for the full year 20X1 appears as follows: Retained Earnings, January 1, 20X1 Net Income Dividends Retained Earnings, December 31, 20x1 $142,000 167,000 (31,000) $278,000 Parachute Theaters accounts for its investment in Stage using the equity method Required a. Present all entries that Parachute Theaters would have recorded in accounting for its investment in Stage during 20X1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet Record the purchase of Stage Company stock. Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal b. Present all consolidation entries needed in a worksheet to prepare a complete set of consolidated financial statements for the year 20x1 view transaction list Consolidation Worksheet Entries Record the preacquisition income and dividends consolidation entry Note: Enter debits before credits. Event Accounts Debit Credit Record entry Clear entry view consolidation entries
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