On January 1, 2018, Sledge had common stock of $120,000 and retained earnings of $260,000. During that

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On January 1, 2018, Sledge had common stock of $120,000 and retained earnings of $260,000. During that year, Sledge reported sales of $130,000, cost of goods sold of $70,000, and operating expenses of $40,000.
On January 1, 2016, Percy, Inc., acquired 80 percent of Sledge's outstanding voting stock. At that date, $60,000 of the acquisition-date fair value was assigned to unrecorded contracts (with a 20-year life) and $20,000 to an undervalued building (with a 10-year remaining life). In 2017, Sledge sold inventory costing $9,000 to Percy for $15,000. Of this merchandise, Percy continued to hold $5,000 at year-end. During 2018, Sledge transferred inventory costing $11,000 to Percy for $20,000. Percy still held half of these items at year-end.
On January 1, 2017, Percy sold equipment to Sledge for $12,000. This asset originally cost $16,000 but had a January 1, 2017, book value of $9,000. At the time of transfer, the equipment's remaining life was estimated to be five years.
Percy has properly applied the equity method to the investment in Sledge.
a. Prepare worksheet entries to consolidate these two companies as of December 31, 2018.
b. Compute the net income attributable to the non-controlling interest for 2018?
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: 978-1259444951

13th edition

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni

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