On December 31, 2018, Price Company purchased a controlling interest in Shipley Company. The balance sheet of Price Company and the consolidated balance sheet on December 3, 2018, were as follows:

On the date of acquisition, the stockholders? equity section of Shipley Company?s balance sheet was as follows:

Common stock.............................$ 90,000Other contributed capital..............90,000Retained earnings...........................56,000Total..............................................$236,000

Required:

A. Prepare the investment elimination entry made to complete a consolidated balance sheet workpaper. Any difference between book value and the value implied by the purchase price relates to subsidiary land.

B. Prepare Shipley Company?s balance sheet as it appeared on December 31, 2018.

Transcribed Image Text:

Price Company Consolidated $ 22,000 $ 37,900 Cash Accounts receivable 35,000 127,000 57,000 Inventory Investment in Shipley Company Plant and equipment (net) Land 161,600 212,000 -0- 190,000 337,000 120,000 220,412 Total $813,912 $706,000 $ 42,000 100,000 $112,500 Accounts payable Note payable Noncontrolling interest in Shipley Company Common stock 100,000 37,412 300,000 -0– 300,000 Other contributed capital Retained earnings 164,000 100,000 164,000 100,000 $706,000 $813,912 Total