Pat Corporation owned a 90 percent interest in Saw Corporation, and during 2010 the following changes occurred
Question:
Pat Corporation owned a 90 percent interest in Saw Corporation, and during 2010 the following changes occurred in Saw's equity and Pat's investment in Saw (in thousands):
During 2011, Saw's net income was $280,000, and it declared $40,000 dividends each quarter of the year. Pat reduced its interest in Saw to 80 percent on July 1, 2011, by selling Saw shares for $120,000.
REQUIRED
1. Prepare the journal entry on Pat's books to record the sale of Saw shares as of the actual date of sale.
2. Prepare the journal entry on Pat's books to record the sale of shares as of January 1, 2011.
3. Prepare a schedule to reconcile the answers to parts 1 and2.
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Advanced Accounting
ISBN: 9780132568968
11th Edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith