On January 1, 2011, Parent Company Purchased 80% of the common stock of Subsidiary Company for $402,000.
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Question:
On January 1, 2011, Parent Company Purchased 80% of the common stock of Subsidiary Company for $402,000. On this date, Subsidiary had total owners' equity of $440,000. Land was undervalued by $20,000, Equipment with a 5-year remaining life was undervalued by $15,000 and inventory was undervalued by $10,000. Any other excess of cost over book value is due to goodwill. Parent accounts for its investment in Subsidiary using the simple equity method.
1) Prepare the Determination and Distribution of Excess Schedule
2) Make all of the entries pertaining to eliminating the investment in Sub's Common Stock.
Related Book For
Advanced Accounting
ISBN: 978-0078025402
11th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
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