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Stage Compony operates on a calendsr - year basis, reporting its results of operations quarterly. For the first quarter of 2 0 X 1 ,

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Stage Compony operates on a calendsr-year basis, reporting its results of operations quarterly. For the first quarter of 20X1, Stage
reported sales of $254,000 and operating expenses of $194,000 and paid dividends of $14,000. On April 1,20X1, Porachute Theaters
Inc. acquired 85 percent of Stage's common stock for $799,000. At that date, the fair volue of the noncontrolling interest wos $141,000,
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 mansgement of Parachute Thesters reviewed the amount attributed to goodwill as a result of its
purchose of Stage common stock and concluded that goodwill was not impaired.
Stage's retained earnings statement for the full year 201 appears as follows:
Retained Earnings, January 1,20x1 $ 146, e8e
Net Incone 171, ede
Dividends (31, eee)
Porachute 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.
b. Present all consolidation entries needed in a worksheet to prepare a complete set of consolidated financial statements for the year
201.
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Present all consolidation entries needed in a worksheet to prepare a complete set of consolidated financial statements for the
year 201.
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