Phillips Company purchased a 90% interest in Standards Corporation for $2,340,000 on January 1, 2016. Standards Corporation had $1,650,000 of common stock and $1,050,000 of retained earnings on that date.
The following values were determined for Standards Corporation on the date of purchase:
Book Value Fair Value
Inventory $240,000 $300,000
Land 2,400,000 2,700,000
Equipment 1,620,000 1,800,000


Required:
A. Prepare a computation and allocation schedule for the difference between the implied and book value in the consolidated statements to work paper.
B. Prepare January 1, 2016, work paper entries to eliminate the investment account and allocate the difference between implied and book value.

Answer rating: 100% (QA)

Part A Computation and Allocation of Difference Schedule Parent Share Non Controlling Share Entir... View the full answer