Advanced Financial Accounting (12th Edition)

Chapter 7, Problem 31P

Advanced Financial Accounting (12th Edition) Problem Preparation of Consolidated Balance Sheet Lofton Company owns 60 percent of Temple Corporations voting shares, purchased on May 17, 20X1, at book value. At that date, the fair value of the non controlling interest was equal to 40 percent of the book value of Temple Corporation. The companies permanent accounts on December 31, 20X6, contained the following balances: Lofton Company Temple Corporation Cash and Receivables $101,000 $ 20,000 Inventory 80,000 40,000 Land 150,000 90,000 Buildings and Equipment 400,000 300,000 Investment in Temple Corporation Stock 141,000 872,000 $450,000 Accumulated Depreciation $135,000 $ 85,000 Accounts Payable 90,000 25,000 Notes Payable 200,000 90,000 Common Stock 100,000 200,000 Retained Earnings 347,000 50,000 $872,000 $450,000 On January 1, 20X2, Lofton paid $100,000 for equipment with a 10-year expected total economic life. The equipment was depreciated on a straight-line basis with no residual value. Temple purchased the equipment from Lofton on December 31, 20X4, for $91,000. Assume Lofton did not change the estimated useful life of the equipment. Temple sold land it had purchased for $30,000 on February 23, 20X4, to Lofton for $20,000 on October 14, 20X5. Assume Lofton uses the fully adjusted equity method. Required a.Prepare a consolidated balance sheet worksheet in good form as of December 31, 20X6. b.Prepare a consolidated balance sheet as of December 31, 20X6.