Power Corporation acquired 100 percent ownership of Upland Products Company on January 1, 20X1, for $200,000. On that date, Upland reported retained earnings of $50,000 and had $100,000 of common stock outstanding. Power has used the equity method in accounting for its investment in Upland. The trial balances for the two companies on December 31, 20X5 appear below.
Additional Information
1. On the date of combination (five years ago), the fair value of Upland's depreciable assets was $50,000 more than the book value. The differential assigned to depreciable assets should be written off over the following 10-year period.
2. There was $10,000 of intercorporate receivables and payables at the end of 20X5.

a. Give all journal entries that Power recorded during 20X5 related to its investment in Upland.
b. Give all elimination entries needed to prepare consolidated statements for 20X5.
c. Prepare a three-part worksheet as of December 31,20X5.

  • CreatedMay 23, 2014
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