Question: Mist Company acquired 65 percent of Blank Corporation s voting common

Mist Company acquired 65 percent of Blank Corporation's voting common stock on June 20, 20X2, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 35 percent of the book value of Blank Corporation. The balance sheets and income statements for the companies at December 31, 20X4, are as follows:

Additional Information
1. Mist uses the modified equity method in accounting for its investment in Blank.
2. During 20X4, Mist charged Blank $24,000 for consulting services provided to Blank during the year. The services cost Mist $17,000.
3. On January 1, 20X4, Blank sold Mist a building for $13,200 above its carrying value on Blank’s books. The building had a 12-year remaining economic life at the time of transfer.
4. On June 14, 20X4, Mist sold land it had purchased for $3,000 to Blank for $7,000. Blank continued to hold the land at December 31, 20X4.

a. Give all elimination entries needed to prepare a full set of consolidated financial statements for 20X4.
b. Prepare a consolidation worksheet for 20X4.
c. Prepare the 20X4 consolidated balance sheet, income statement, and retained earningsstatement.

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  • CreatedMay 23, 2014
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