Orange Company acquired 100 percent of Shell Company's voting common stock on January 1, 2019, for $350,000.
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Question:
Orange Company acquired 100 percent of Shell Company's voting common stock on January 1, 2019, for $350,000. At that date, the book value and fair values of Shell's assets and liabilities were equal. Shell reported the following summarized balance sheet data:
Shell reported net income of $55,000 for 2019 and paid dividend of $20,000
Required:
a. Give the journal entries recorded by Orange Company during 2019 on its book if Shell accounts for its investment in Shell using equity method.
b. Prepare the book value calculation table
c. Give the consolidation entries needed at December 31, 2019, to prepare consolidated financial statements.
Related Book For
Fundamentals of Advanced Accounting
ISBN: 978-0077667061
5th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
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