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Workpaper Purchase and Sale of Shares, Equity Method LO 3 LO 4 ( Note: This is the same problem as PROBLEM 8 - 4 ,
WorkpaperPurchase and Sale of Shares, Equity Method LO LO
Note: This is the same problem as PROBLEM but assuming use of the complete or the partial equity method.
Trial balances for Porter Company and its subsidiary, Spitz Company, as of December follow:
Debits
Porter
Spitz
Cash $ $
Accounts Receivable net
Inventory
Investment in Spitz Company
Plant Assets
Land
Dividends Declared,
Total $ $
Credits
Liabilities $ $
Common Stock, $ par value
Other Contributed Capital
Retained Earnings
Income Summary
Total $ $
Porter Company made the following openmarket purchase and sale of Spitz Company common stock: January purchased shares for $; May sold shares for $
The book value of Spitz Company's net assets on January was $; the excess of cost over net assets acquired relates to land. Subsequent changes in the book value of Spitz Company's net assets are entirely attributable to earnings retained in the business. Spitz Company earns its income evenly throughout the year.
Required:
Prepare a consolidated financial statements workpaper as of December Begin the income statement section of the workpaper with Net Income before Equity in Subsidiary Income and Gain on Sale of Investment, which is $ for Porter Company and $ for Spitz Company.
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