Suppose that the fair value of the payment made by Proud was $120.000 and the book value of net assets of Stergis was the same as of the date of acquisition.

REQUIRED:

1- Give all journals regarding the EQUITY METHOD.

2- Give all elimination entries.

3- Prepare consolidated financial statements. (USE MY TEMPLATES)

4- In calculating NCI, you must also show how you calculated it in detail!

YOU MUST PREPARE AN EXCEL FILE.

Proud Corporation acquired 80 percent of Stergis Company's voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Stergis at that date. Proud uses the equity method in accounting for its ownership of Stergis during 20X3. On December 31, 20X3, the trial balances of the two companies are as follows: Proud Corporation Debit $173,000 500,000 Credit Stergis Company Debit Credit $105,000 300,000 Item Current Assets Depreciable Assets Investment in Stergis Company Stock Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities I ong-Term Debt Common Stock Retained Earnings Sales Income from Subsidiary 25,000 105,000 40,000 15,000 75,000 10,000 $175,000 50,000 100,000 200,000 230,000 200,000 $ 75,000 40,000 120,000 100,000 50,000 120,000 $505,000 $505,000