On 1/1/2014 CARSON purchased all of the stock of TRUMP for book value when TRUMP had $1,000,000
Question:
On 1/1/2014 CARSON purchased all of the stock of TRUMP for book value when TRUMP had $1,000,000 in retained earnings and $3,000,000 in common stock.
On 12/31/2014 the balance sheets of TRUMP and CARSON Companies were as follows:
TRUMP CARSON
Cash $1,200,000 $5,000,000
a/r $2,000,000 $7,000,000
land $1,000,000 $3,000,000
equipment $2,000,000 $9,000,000
a/d equip $1,100,000 $1,800,000
investment TRUMP ?
total assets $5,100,000 $23,000,000
a/p $1,000,000 $2,000,000
c/s $3,000,000 $12,000,000
r/e $1,100,000 ?
Notes: The equipment has a 10 year life with no salvage.
Both TRUMP AND CARSON paid dividends this year.
Income statements for the year are as follows:
TRUMP CARSON
Sales 830,000 4,500,000
Cogs 600,000 2,800,000
Gross profit 230,000 1,700,000
Dep exp 100,000 800,000
Invest inc. 0 ?
Income 130000 ?
REQUIRED:
MAKE THE JOURNAL ENTRIES CARSON MAKES THIS YEAR BASED ON ITS OWNERSHIP OF TRUMP (LET ME KNOW WHAT METHOD YOU ARE USING)
MAKE THE WORKSHEET ENTRIES NEEDED AT 12/31.
PREPARE THE CONSOLIDATED BALANCE SHEET.
PREPARE THE CONSOLIDATED INCOME STATEMENT.
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III