On May 1, 2015, Peters Company purchased 80% of the common stock of Smith Company for...

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On May 1, 2015, Peters Company purchased 80% of the common stock of Smith Company for $52,500. Additional data concerning these two companies for the years 2015 and 2016 are: 2015 2016 Peters Smith Peters Smith Common stock $104,000 $25,100 $104,000 $25,100 Other contributed capital 43,300 10,600 43.300 10,600 Retained earnings, 1/1 72,300 10,900 128.000 58,100 Net income (loss) 69.700 49,200 36,800 (4,900) Cash dividends (11/30) 14.000 2,000 5.100 -0- Any difference between book value and the value implied by the purchase price relates to Smith Company's land. Peters Company uses the cost method to record its investment. (a) Your answer is correct. Prepare the workpaper entries that would be made on a consolidated statements workpaper for the years ended December 31, 2015 and 2016 for Peters Company and its subsidiary, assuming that Smith Company's income is earned evenly throughout the year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit (b) 2015 Dividend Income Credit 1600 Dividends Declared- Subsidlary Company (To record dividend income) Common Stock-Subaldlary Company 25100 Other Contributed Capital-Subsidiary Company 10600) Retained Earnings - Subsidiary Company 10900 Difference between implied and Book Value 2625 Subsidiary Income Purchased 16400 Investment In Subsidiary Noncontrolling Interest (To eliminate investment in subsidiary and create noncontrolling interest) Land Difference between Impiled and Book Value (To eliminate excess of the 2625 book value of equity acquired.) 2016 Investment in Subsidiary 24640 Retained Earnings - Parent Company (To establish reciprocity) Common Stock-Subsidiary Company 25100 Other Contributed Capital - Subsidiary Company 10600 Retained Earnings - Subsidiary Company 58100 Land 2625 Investment In Subsidiary Noncontrolling Interest (To eliminate investment in subsidiary and create noncontrolling interest) eTextbook and Media List of Accounts -Your answer is partially correct. Calculate controlling interest in consolidated net income and consolidated retained earnings for 2015 and 2016. Controlling interest in consolidated net income $ Consolidated Retained Earnings eTextbook and Media List of Accounts Save for Later 2015 2016 $ 152640 180420 1600 52500 13125 2625 24640 77140 19285 SUPPORT Attempts: 2 of 5 used Attempts: 1 of 5 used Submit Answer On May 1, 2015, Peters Company purchased 80% of the common stock of Smith Company for $52,500. Additional data concerning these two companies for the years 2015 and 2016 are: 2015 2016 Peters Smith Peters Smith Common stock $104,000 $25,100 $104,000 $25,100 Other contributed capital 43,300 10,600 43.300 10,600 Retained earnings, 1/1 72,300 10,900 128.000 58,100 Net income (loss) 69.700 49,200 36,800 (4,900) Cash dividends (11/30) 14.000 2,000 5.100 -0- Any difference between book value and the value implied by the purchase price relates to Smith Company's land. Peters Company uses the cost method to record its investment. (a) Your answer is correct. Prepare the workpaper entries that would be made on a consolidated statements workpaper for the years ended December 31, 2015 and 2016 for Peters Company and its subsidiary, assuming that Smith Company's income is earned evenly throughout the year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit (b) 2015 Dividend Income Credit 1600 Dividends Declared- Subsidlary Company (To record dividend income) Common Stock-Subaldlary Company 25100 Other Contributed Capital-Subsidiary Company 10600) Retained Earnings - Subsidiary Company 10900 Difference between implied and Book Value 2625 Subsidiary Income Purchased 16400 Investment In Subsidiary Noncontrolling Interest (To eliminate investment in subsidiary and create noncontrolling interest) Land Difference between Impiled and Book Value (To eliminate excess of the 2625 book value of equity acquired.) 2016 Investment in Subsidiary 24640 Retained Earnings - Parent Company (To establish reciprocity) Common Stock-Subsidiary Company 25100 Other Contributed Capital - Subsidiary Company 10600 Retained Earnings - Subsidiary Company 58100 Land 2625 Investment In Subsidiary Noncontrolling Interest (To eliminate investment in subsidiary and create noncontrolling interest) eTextbook and Media List of Accounts -Your answer is partially correct. Calculate controlling interest in consolidated net income and consolidated retained earnings for 2015 and 2016. Controlling interest in consolidated net income $ Consolidated Retained Earnings eTextbook and Media List of Accounts Save for Later 2015 2016 $ 152640 180420 1600 52500 13125 2625 24640 77140 19285 SUPPORT Attempts: 2 of 5 used Attempts: 1 of 5 used Submit Answer