Penn Corporation purchased 80 percent ownership of ENC Company on January 1, 20X2, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of ENC. On January 1, 20X4, Penn sold 2,000 shares of ENC’s stock for $60,000 to American School Products and recorded a $10,000 gain. Trial balances for the companies on December 31, 20X4, contain the following data:

ENC’s net income was earned evenly throughout the year. Both companies declared and paid their dividends on December 31, 20X4. Penn uses the basic equity method in accounting for its investment in ENC.

a. Prepare the elimination entries needed to complete a full consolidation worksheet for 20X4.
b. Prepare a consolidation worksheet for20X4.

  • CreatedMay 23, 2014
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