problem 4-10

Project Description:

consolidated workpaper, partially owned subsidiary, cost method
place company purchased 92% of the common stock of shaw, inc. on january 1, 2003, for
$400,000. trial balances at the end of 2003 for the companies were:
place shaw
cash $ 80,350 $ 87,000
accounts and notes receivable 200,000 210,000
inventory, 1/1 70,000 50,000
investment in shaw, inc. 400,000 —0—
plant assets 300,000 200,000
dividends declared 35,000 22,000
purchases 240,000 150,000
selling expenses 28,000 20,000
other expenses 15,000 13,000
$1,368,350 $752,000
accounts and notes payable $ 99,110 $ 38,000
other liabilities 45,000 15,000
common stock, $10 par 150,000 100,000
other contributed capital 279,000 149,000
retained earnings, 1/1 225,000 170,000
sales 550,000 280,000
dividend income 20,240 —0—
$1,368,350 $752,000
inventory balances on december 31, 2003, were $25,000 for place and $15,000 for shaw, inc.
shaw’s accounts and notes payable contain a $15,000 note payable to place.
required:
prepare a workpaper for the preparation of consolidated financial statements on december
31, 2003. the difference between cost and book value of equity acquired relates to subsidiary
land which is included in plant assets.
problem 4-
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