Question

Kennelly Corporation acquired all of Short Company's common shares on January 1, 20X5, for $180,000. On that date, the book value of the net assets reported by Short was $150,000. The entire differential was assigned to depreciable assets with a six-year remaining economic life from January 1, 20X5. The adjusted trial balances for the two companies on December 31, 20X5, are as follows:


Kennelly uses the equity method in accounting for its investment in Short. Short declared and paid dividends on December 31, 20X5.

Required
a. Prepare the elimination entries needed as of December 31, 20X5, to complete a consolidation worksheet.
b. Prepare a three-part consolidation worksheet as of December 31,20X5.


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  • CreatedMay 23, 2014
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