DOC

P5-36 Consolidation Workpaper at End of First Year of Ownership

By Carmen Scott,2014-04-18 18:30
8 views 0
Power Corporation and Best Company. Consolidation Workpaper. December 31, 20X8. Power, Best, Eliminations, Consol-. Item, Corp. Co. Debit, Credit, idated

    P5-36 Consolidation Workpaper at End of First Year of Ownership

a. Eliminating entries:

     E(1) Income from Subsidiary 16,500

     Dividends Declared 12,000

     Investment in Best Company Stock 4,500

     Eliminate income from subsidiary.

     E(2) Income to Noncontrolling Interest 6,000

     Dividends Declared 4,000

     Noncontrolling Interest 2,000

     Assign income to noncontrolling interest.

     E(3) Common Stock Best Company 60,000

     Retained Earnings, January 1 40,000

     Differential 21,000

     Investment in Best Company Stock 96,000

     Noncontrolling Interest 25,000

     Eliminate beginning investment balance.

     E(4) Buildings and Equipment 15,000

     Goodwill 6,000

     Differential 21,000

     Assign beginning differential.

     E(5) Depreciation Expense 1,500

     Accumulated Depreciation 1,500

     Amortize differential:

     $1,500 = $15,000 / 10 years

     E(6) Goodwill Impairment Loss 3,500

     Goodwill 3,500

     Write down goodwill for impairment.

b. Power Corporation and Best Company

    Consolidation Workpaper

    December 31, 20X8

     Power Best Eliminations Consol-

     Item Corp. Co. Debit Credit idated

    Sales 260,000 180,000 440,000 Income from Subsidiary 16,500 (1) 16,500 Credits 276,500 180,000 440,000 Cost of Goods Sold 125,000 110,000 235,000 Wage Expense 42,000 27,000 69,000 Depreciation Expense 25,000 10,000 (5) 1,500 36,500 Interest Expense 12,000 4,000 16,000 Other Expenses 13,500 5,000 18,500 Goodwill Impairment Loss (6) 3,500 3,500 Debits (217,500) (156,000) (378,500)

     61,500 Income to Noncon-

     trolling Interest (2) 6,000 (6,000) Net Income,

     carry forward 59,000 24,000 27,500 55,500

    Ret. Earnings, Jan. 1 102,000 40,000 (3) 40,000 102,000 Net Income, from above 59,000 24,000 27,500 55,500

     161,000 64,000 157,500 Dividends Declared (30,000) (16,000) (1) 12,000

     (2) 4,000 (30,000) Ret. Earnings, Dec. 31,

     carry forward 131,000 48,000 67,500 16,000 127,500

    Cash 47,500 21,000 68,500 Accounts Receivable 70,000 12,000 82,000 Inventory 90,000 25,000 115,000 Land 30,000 15,000 45,000 Buildings and Equipment 350,000 150,000 (4) 15,000 515,000 Investment in Best

     Company Stock 100,500 (1) 4,500

     (3) 96,000 Differential (3) 21,000 (4) 21,000 Goodwill (4) 6,000 (6) 3,500 2,500 Debits 688,000 223,000 828,000

     Power Best Eliminations Consol-

     Item Corp. Co. Debit Credit idated

    Accum. Depreciation 145,000 40,000 (5) 1,500 186,500 Accounts Payable 45,000 16,000 61,000 Wages Payable 17,000 9,000 26,000 Notes Payable 150,000 50,000 200,000 Common Stock

     Power Corporation 200,000 200,000

     Best Company 60,000 (3) 60,000 Retained Earnings,

     from above 131,000 48,000 67,500 16,000 127,500 Noncontrolling

     Interest (2) 2,000

     (3) 25,000 27,000 Credits 688,000 223,000 169,500 169,500 828,000

Report this document

For any questions or suggestions please email
cust-service@docsford.com