Question
ZigmaCo. StandardCo. Item Debit Credit Debit Credit Current Assets $238,000 $95,000 Depreciable Assets 300,000 170,000 Investment in Standard Co. 100,000 Other Expenses 90,000 70,000 Depreciation
ZigmaCo. | StandardCo. | |||
Item | Debit | Credit | Debit | Credit |
Current Assets | $238,000 | $95,000 | ||
Depreciable Assets | 300,000 | 170,000 | ||
Investment in Standard Co. | 100,000 | |||
Other Expenses | 90,000 | 70,000 | ||
Depreciation Expense | 30,000 | 17,000 | ||
Dividends Declared | 32,000 | 10,000 | ||
Accumulated Depreciation | $120,000 | $85,000 | ||
Current Liabilities | 50,000 | 30,000 | ||
Long-Term Debt | 120,000 | 50,000 | ||
Common Stock | 100,000 | 50,000 | ||
Retained Earnings | 175,000 | 35,000 | ||
Sales | 200,000 | 112,000 | ||
Income from Standard Co. | 25,000 | |||
$790,000 | $790,000 | $362,000 | $362,000 |
On January 1, 20X9, Zigma Company acquired 100 percent of Standard Company's common shares at underlying book value. Zigma uses the equity method in accounting for its ownership of Standard. On December 31, 20X9, the trial balances of the two companies are as follows:
Required:
1) Prepare all the journal entries on Zigma's books for 2009 associated with the acquisition of standard using the equity method
2) Prepare the eliminating entries needed as of December 31, 20X9, to complete a consolidation worksheet.
3) Prepare a three-part consolidation worksheet as of december 31, 20X9.
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