Power Corporation acquired 75 percent of Best Company’s ownership on January 1, 20X8, for $96,000. At that date, the fair value of the noncontrolling interest was $32,000. The book value of Best’s net assets at acquisition was $100,000. The book values and fair values of Best’s assets and liabilities were equal, except for Best’s buildings and equipment, which were worth $20,000 more than book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Power concluded at December 31, 20X8, that goodwill from its purchase of Best shares had been impaired and the correct carrying amount was $2,500. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders. Trial balance data for Power and Best on December 31, 20X8, are as follows:

a. Give all elimination entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8.
b. Prepare a three-part consolidation worksheet for 20X8 in goodform.

  • CreatedMay 23, 2014
  • Files Included
Post your question