Question

Platt Company acquired an 80% interest in Sloane Company when the retained earnings of Sloane Company were $300,000. On January 1, 2011, Sloane Company recorded a $250,000 gain on the sale to Platt Company of equipment with a remaining life of five years. On January 1, 2012, Platt Company recorded a $180,000 gain on the sale to Sloane Company of equipment with a remaining life of six years. Sloane Company reported net income of $180,000 and declared dividends of 60,000 in 2012. It reported retained earnings of $520,000 on January 1, 2012, and $640,000 on December 31, 2012. Platt Company reported net income from independent operations of $400,000 in 2012 and retained earnings of $1,800,000 on December 31, 2012.

Required:
A. Prepare in general journal form the entries necessary in the December 31, 2012, consolidated statements workpaper to eliminate the effects of the intercompany sales.
B. Calculate controlling interest in consolidated net income for the year ended December 31, 2012.
C. Calculate consolidated retained earnings on December 31, 2012.
D. Calculate noncontrolling interest in consolidated income for the year ended December 31, 2012.



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  • CreatedMarch 13, 2015
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