On January 1, 2009, Aronsen Company acquired 90 percent of Siedel Companys outstanding shares. Siedel had a
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Aronsen paid $584,100 for this investment. The acquisition-date fair value of the 10 percent noncontrolling interest was $64,900. The excess fair value over book value associated with the acquisition was used to increase land by $89,000 and to recognize copyrights (16-year remaining life) at $80,000. Subsequent to the acquisition, Aronsen applied the initial value method to its investment account.
In the 2009–2010 period, the subsidiary’s retained earnings increased by $100,000. During 2011, Siedel earned income of $80,000 while paying $20,000 in dividends. Also, at the beginning of 2011, Siedel issued 4,000 new shares of common stock for $38 per share to finance the expansion of its corporate facilities. Aronsen purchased none of these additional shares and therefore recorded no entry. Prepare the appropriate 2011 consolidation entries for these two companies.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
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