On January 1, 20X8, P Company acquired 90 percent of Q Company's voting stock, at underlying book value. The fair value of the noncontrolling interest was equal to 10 percent of the book value of Q Company at that date. The amount of accumulated depreciation to eliminate is $50,000. P uses the equity method in accounting for its ownership of Q. On December 31, 20X8, the trial balances of the two companies are as follows: (At bottom)

Required:

1. Give all consolidating entries required on December 31, 20X8, to prepare consolidated financial statements.

2. Prepare a three-part consolidation worksheet as of December 31, 20X8.

Use Excel formulas to make or evidence each of your calculations of all dollar amounts. Do not enter any dollar amounts directly, unless it is unavoidable for obvious reasons. Use the tab function at the bottom of the Excel file to complete the assignment.

Prepare and submit one Excel spreadsheet for this assignment. Use the following naming convention for your file: MyNameCTA2Option2.

Transcribed Image Text:

Current Assets Depreciable Assets Investment in S Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Debt Common Stock Retained Earnings Sales Income from S Debit P Company $ 225,500 300,000 144,000 30,000 180,000 40,000 Credit $ 150,000 45,000 75,000 100,000 282,500 253,500 13,500 $ 919,500 $ 919,500 Q Company Debit $ 145,000 225,000 25,000 85,000 10,000 $ 490,000 Credit $ 100,000 20,000 90,000 75,000 80,000 125,000 $ 490,000 Current Assets Depreciable Assets Investment in S Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Debt Common Stock Retained Earnings Sales Income from S Debit P Company $ 225,500 300,000 144,000 30,000 180,000 40,000 Credit $ 150,000 45,000 75,000 100,000 282,500 253,500 13,500 $ 919,500 $ 919,500 Q Company Debit $ 145,000 225,000 25,000 85,000 10,000 $ 490,000 Credit $ 100,000 20,000 90,000 75,000 80,000 125,000 $ 490,000

Answer rating: 100% (QA)

Consolidated Balance sheet of PQ or PS Company Particulars P Q Adjustments Consolidated A... View the full answer