This problem is a continuation of P5-32. Power Corporation acquired 75 percent of Best Companys ownership on

This problem is a continuation of P5-32. Power Corporation acquired 75 percent of Best Company’s ownership on January 1, 20X8, for $96,000. At that date, the fair value of the noncontrolling interest was $32,000. The book value of Best’s net assets at acquisition was $100,000. The book values and fair values of Best’s assets and liabilities were equal, except for Best’s buildings and equipment, which were worth $20,000 more than book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Power concluded at December 31, 20X8, that goodwill from its purchase of Best shares had been impaired and the correct carrying amount was $2,500. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders. No additional impairment occurred in 20X9.

Required
a. Give all elimination entries needed to prepare a three-part consolidation worksheet as of December 31, 20X9.
b. Prepare a three-part consolidation worksheet for 20X9 in good form.
c. Prepare a consolidated balance sheet, income statement, and retained earnings statement for20X9.

Transcribed Image Text:

Power Corporation Best Company Credit Credit Accounts Receivable Buildings & Equipment Investment in Best Co. Stock Cost of Goods Solo Dividends Declared Accumulated Depreciation Accounts Payable 6 Retained Earnings 2 Income from Subsidiary 2 $1,027,375 $1,027,375 $429,000