On January 1, 2021, Perch Company purchased an 80% interest in the capital stock of Salmon...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1, 2021, Perch Company purchased an 80% interest in the capital stock of Salmon Company for $3,400,000. At that time, Salmon Company had common stock of $2,200,000 and retained earnings of $620,000. Perch Company uses the equity method to record its investment in Salmon Company. Differences between the fair value and the book value of the identifiable assets of Salmon Company were as follows: Equipment Land Inventory Fair Value in Excess of Book Value $400,000 200,000 80,000 The book values of all other assets and liabilities of Salmon Company were equal to their fair values on January 1, 2021. The equipment had a remaining life of five years on January 1, 2021; the inventory was sold in 2021. Salmon Company's net income and dividends declared in 2021 were as follows: Year 2021 Net Income of $400,000; Dividends Declared of $100,000 PERCH COMPANY AND SUBSIDIARY TRIAL BALANCES For the Year Ended December 31, 2022 Perch Company Salmon Company Cash 280,000 260,000 Accounts Receivable 1,040,000 760,000 Inventory 960,000 700,000 Investment in Salmon Company 3,800,000 Land 1,280,000 Plant and Equipment 1,440,000 1,120,000 Accounts Payable (528,000) (440,000) Notes Payable (360,000) (120,000) Common Stock (4,000,000) (2,200,000) Retained Earnings, Jan 1 (2,112,000) (920,000) Dividends Declared 360,000 240,000 Sales (4,400,000) (1,800,000) Equity in Net Income of Salmon (480,000) Cost of Goods Sold 3,600,000 800,000 Depreciation Expense Other Expenses 160,000 120,000 240,000 200,000 REQUIRED: 1. Prepare the working paper entries to consolidate the December 31, 2022 trial balances of Perch and Salmon. 2. Calculate the NCI's share Salmon's Net Income and the consolidated NCI balance. On January 1, 2021, Perch Company purchased an 80% interest in the capital stock of Salmon Company for $3,400,000. At that time, Salmon Company had common stock of $2,200,000 and retained earnings of $620,000. Perch Company uses the equity method to record its investment in Salmon Company. Differences between the fair value and the book value of the identifiable assets of Salmon Company were as follows: Equipment Land Inventory Fair Value in Excess of Book Value $400,000 200,000 80,000 The book values of all other assets and liabilities of Salmon Company were equal to their fair values on January 1, 2021. The equipment had a remaining life of five years on January 1, 2021; the inventory was sold in 2021. Salmon Company's net income and dividends declared in 2021 were as follows: Year 2021 Net Income of $400,000; Dividends Declared of $100,000 PERCH COMPANY AND SUBSIDIARY TRIAL BALANCES For the Year Ended December 31, 2022 Perch Company Salmon Company Cash 280,000 260,000 Accounts Receivable 1,040,000 760,000 Inventory 960,000 700,000 Investment in Salmon Company 3,800,000 Land 1,280,000 Plant and Equipment 1,440,000 1,120,000 Accounts Payable (528,000) (440,000) Notes Payable (360,000) (120,000) Common Stock (4,000,000) (2,200,000) Retained Earnings, Jan 1 (2,112,000) (920,000) Dividends Declared 360,000 240,000 Sales (4,400,000) (1,800,000) Equity in Net Income of Salmon (480,000) Cost of Goods Sold 3,600,000 800,000 Depreciation Expense Other Expenses 160,000 120,000 240,000 200,000 REQUIRED: 1. Prepare the working paper entries to consolidate the December 31, 2022 trial balances of Perch and Salmon. 2. Calculate the NCI's share Salmon's Net Income and the consolidated NCI balance.
Expert Answer:
Answer rating: 100% (QA)
1 Working paper entries to consolidate the December 31 2022 trial balances of Perch and Salmon Perch ... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Match each item related to computerized accounting systems to its best description. Efficiency Accuracy Backup capability Posting journal entries Generating financial statements Financial analysis...
-
On January 1, 2018, Porter Company purchased an 80% interest in the capital stock of Salem Company for $850,000. At that time, Salem Company had capital stock of $550,000 and retained earnings of...
-
On January 1, 2010, Porter Company purchased an 80% interest in the capital stock of Salem Company for $850,000. At that time, Salem Company had capital stock of $550,000 and retained earnings of...
-
A certain apple bruises if a net force greater than 9 . 5 N is exerted on it . Would a 0 . 1 3 k g apple be likely to bruise if it falls 1 . 8 m and stops after sinking 0 . 0 5 m into the grass?...
-
Consider a utility function U for which U(0) = 5, U(1) = 8, and U(2) = 10. Suppose that a person who has this utility function is indifferent to either of two gambles X and Y, for which the...
-
The following selected transactions occur during the first year of operations. Determine how each should be reported in the statement of cash flows. 1. Issued one million shares of common stock at...
-
Show that the market portfolio must be on the capital market line and on the portion of the curve called the efficient frontier (see Section 21.2).
-
Urban Auto Glass specializes in the repair and replacement of windshields for passenger vehicles. Variable and fixed costs related to installation activities for the most recent month (July) are...
-
y 4- E 3- 2 1- -4-3-2-1 0 1 2 3 -1- -2- H 3 G 5 F X 4 5 6 Analyze the algebraic properties of this quadrilateral. The slope of HE is [Select] The slope of HG is [Select] The slope of GF is [Select]...
-
Consider the soil profile shown in Figure 11.44 subjected to the uniformly distributed load, Îs, on the ground surface. Given: ÎÏ = 26 kN/m2; H1 = 1.83 m; H2 = 3.66 m; and H3 = 5.5...
-
Walters and Witt, a law firm, is analyzing the profitability of its cases.During the year, the firm represented the Umberg Company in numerous routine legal issues, for which it charged a monthly...
-
Your investment advisor promises "invest $10,000 with me today and I double your money in four years." What is the implied interest rate (APR, annually compounded) in her promise?
-
The images above show agricultural activities that occur in the area surrounding a central city in the Middle East. Use your knowledge of agricultural land-use patterns to predict the location of...
-
(1 point) Consider a forward contract on a commodity with a current price of $2800 and delivery time in 4 months. Assume that the risk-free rate of interest is 7% compounded monthly and there is no...
-
Nano Limited manufactures two products. The production of Product 1 is entirely carried out in the Green department. The entire production of Product 2 takes place in the Yellow department. Nano...
-
Course: Strategic pricing decision Good evening, please your support with this question according to the data of the case: Case: McDONALD'S: THE HAMBURGER PRICE WARS...
-
Here are some key questions to ask as you navigate the modern network today. 1. Are we working within a fully integrated network infrastructure? 2. What percentage of NOC staff time is spent...
-
Convert the numeral to a HinduArabic numeral. A94 12
-
Discuss the effect on setting performance bonuses for staff if financial performance for a period contains both realised and unrealised gains/losses.
-
Financial statements should reflect realistically the performance and position of an organisation, but most of the accountant's rules conflict directly with the concept of realism. Discuss.
-
Explain why financial reports prepared under the historical cost convention are subject to the following major limitations: inventory is undervalued the depreciation charge to the income statement...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App