Mighty Company purchased a 60 percent interest in Lowly Company on January 1, 2010, for $420,000 in
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Neither company has paid dividends since these acquisitions occurred. On January 1, 2011, Lowly’s book value was $800,000, a figure that rises to $840,000 (Common Stock of $300,000 and Retained Earnings of $540,000) by year-end. Mighty’s book value was $1.7 million at the beginning of 2011 and $1.8 million (Common Stock of $1 million and Retained Earnings of $800,000) at December 31, 2011. No intra-entity transactions have occurred and no additional stock has been sold. Each company applies the initial value method in accounting for the individual investments. What worksheet entries are required to consolidate these two companies for 2011? What is the noncontrolling interest in the subsidiary’s net income for this year?
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Related Book For
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
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