Carpenter Company has the following balance sheet on December 31, 2015:
The investment in Hinckley Company account reflects the original cost of an 80% interest (40,000 shares) purchased on January 1, 2012. On the date of the purchase, Hinckley stockholders’ equity has a book value of $150,000. Hinckley’s other book values approximate fair values, except for a machine with a 5-year remaining life that is undervalued by $20,000. Any additional excess is attributed to goodwill. A review of Hinckley’s past financial statements reveals the following:
Carpenter sells 2,000 shares of Hinckley common stock on January 1, 2016, for $40,000.
Prepare the necessary entries on Carpenter’s books to account accurately for the sale of the 2,000 Hinckley shares. Provide a determination and distribution of excess schedule along with all other necessary computations as support.

  • CreatedApril 13, 2015
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