Owl Corporation acquired 90% of the voting stock of Hunt Corporation on January 1, 2018 for...

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Owl Corporation acquired 90% of the voting stock of Hunt Corporation on January 1, 2018 for $6,300 when Hunt had Capital Stock of $5,000 and Retained Earnings of $1,000. The excess of cost over book value was assigned $150 to undervalued inventories that were sold in 2018, $200 to undervalued land, $400 to undervalued equipment with a remaining useful life of 5 years, and the remainder to goodwill. Owl has accounted for its investment in Hunt using the equity method. Owl Corporation owed Hunt Corporation $100 on open account at the end of the year. Dividends receivable in the amount of $450 payable from Hunt to Owl is included in Owl's net receivables. The separate financial statements of Owl and Hunt Corporations at the end of the fiscal year ended December 31, 2019 are presented below: Income Statement Sales Income from Hunt Cost of Sales Depreciation Expense Other expenses Net income Retained Earnings Statement Retained Earnings. 1/1/2019 Add: Net income Less: Dividends Retained Earnings, 12/31/2019. Balance Sheet Cash Receivables-net Inventories Land Equipment and Buildings-net Investment in Hunt Corporation TOTAL ASSETS Accounts Payable Dividends payable Capital Stock Retained Earnings TOTAL LIABILITIES & EQUITY Owl 10,000 1,278 (4,000) (1,000) (1,800) 4,478 2.522 4,478 (2.000) 5.000 1,679 1.550 1.500 1.000 7.500 7.371 20,600 3,000 1,000 11.600 5.000 20,600 Hunt 6,500 (3,300) (1,000) (700) 1,500 2.000 1,500 (1.000) 2.500 1.900 600 1.200 600 5.700 10,000 2,000 500 5.000 2.500 10,000 Required: On the next page, prepare the working paper entries that would be entered on a worksheet to consolidate Owl Company and Hunt Company on December 31, 2019. Owl Corporation acquired 90% of the voting stock of Hunt Corporation on January 1, 2018 for $6,300 when Hunt had Capital Stock of $5,000 and Retained Earnings of $1,000. The excess of cost over book value was assigned $150 to undervalued inventories that were sold in 2018, $200 to undervalued land, $400 to undervalued equipment with a remaining useful life of 5 years, and the remainder to goodwill. Owl has accounted for its investment in Hunt using the equity method. Owl Corporation owed Hunt Corporation $100 on open account at the end of the year. Dividends receivable in the amount of $450 payable from Hunt to Owl is included in Owl's net receivables. The separate financial statements of Owl and Hunt Corporations at the end of the fiscal year ended December 31, 2019 are presented below: Income Statement Sales Income from Hunt Cost of Sales Depreciation Expense Other expenses Net income Retained Earnings Statement Retained Earnings. 1/1/2019 Add: Net income Less: Dividends Retained Earnings, 12/31/2019. Balance Sheet Cash Receivables-net Inventories Land Equipment and Buildings-net Investment in Hunt Corporation TOTAL ASSETS Accounts Payable Dividends payable Capital Stock Retained Earnings TOTAL LIABILITIES & EQUITY Owl 10,000 1,278 (4,000) (1,000) (1,800) 4,478 2.522 4,478 (2.000) 5.000 1,679 1.550 1.500 1.000 7.500 7.371 20,600 3,000 1,000 11.600 5.000 20,600 Hunt 6,500 (3,300) (1,000) (700) 1,500 2.000 1,500 (1.000) 2.500 1.900 600 1.200 600 5.700 10,000 2,000 500 5.000 2.500 10,000 Required: On the next page, prepare the working paper entries that would be entered on a worksheet to consolidate Owl Company and Hunt Company on December 31, 2019.

Answer rating: 100% (QA)

Complete the consolidation working papers for Owl Corporation and Subsidiary Owl Corporation and Sub... View the full answer