Pillow Corporation acquired 80 percent ownership of Sheet Company on January 1, 20X7, for $173,000. At...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Pillow Corporation acquired 80 percent ownership of Sheet Company on January 1, 20X7, for $173,000. At that date, the fair value of the noncontroling interest was $43,250 The trial balances for the two companies on December 31, 20X8, included the following amounts: Pillou Corporation Debit 59,000 83,000 275,000 B0,000 500,000 Sheet Company Debit $ 31,000 Credit Credit Item Cash Accounts Receivable Inventory 71,000 118,000 30,000 150,000 Land Buildings & Equipment Investment in Sheet Company Cost of Goods Sold 206, 200 498,000 25,000 310,000 15, ৩७8 Depreciation Expense other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Mortgages Payable Common Stock 62,000 45,000 100,000 25,000 $ 180,000 $ 90,000 30,000 70,000 50,000 86,000 200,000 300,000 Retained Earnings 385,000 650,000 24,200 140,000 Sales 470,000 Income from Sheet Company $1,825,200 $1,825,200 $850,000 $850,000 Additional Information 1. On January 1, 20X7, Sheet reported net assets with a book value of $150,000 and a fair value of $191,250. Goodwill of $25.000 was recorded at the acquisition. Accumulated depreciation on buildings and equipment was $60,000 on the acquisition date. Sheet's depreciable assets had an estimated economic life of 11 years on the date of combination. 2. At December 31, 20x8, Pillow's management reviewed the amount attributed to goodwill and concluded goodwill was impaired and should be reduced to $14,000. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders. 3. Pillow used the equity method in accounting for its investment in Sheet 4. Detailed analysis of receivables and payables showed that Pillow owed Sheet $9,000 on December 31, 20X8. 5. Assume that the Investment in Sheet Company at 1/1/X8 is $202,000. Required: a. Prepare all journal entries recorded by Pillow with regard to its investment in Sheet during 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) b. Prepare all consolidation entries needed to prepare a full set of consolidated financial statements for 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) c. Prepare a three-part consolidation worksheet as of December 31, 20X8. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) Pillow Corporation acquired 80 percent ownership of Sheet Company on January 1, 20X7, for $173,000. At that date, the fair value of the noncontroling interest was $43,250 The trial balances for the two companies on December 31, 20X8, included the following amounts: Pillou Corporation Debit 59,000 83,000 275,000 B0,000 500,000 Sheet Company Debit $ 31,000 Credit Credit Item Cash Accounts Receivable Inventory 71,000 118,000 30,000 150,000 Land Buildings & Equipment Investment in Sheet Company Cost of Goods Sold 206, 200 498,000 25,000 310,000 15, ৩७8 Depreciation Expense other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Mortgages Payable Common Stock 62,000 45,000 100,000 25,000 $ 180,000 $ 90,000 30,000 70,000 50,000 86,000 200,000 300,000 Retained Earnings 385,000 650,000 24,200 140,000 Sales 470,000 Income from Sheet Company $1,825,200 $1,825,200 $850,000 $850,000 Additional Information 1. On January 1, 20X7, Sheet reported net assets with a book value of $150,000 and a fair value of $191,250. Goodwill of $25.000 was recorded at the acquisition. Accumulated depreciation on buildings and equipment was $60,000 on the acquisition date. Sheet's depreciable assets had an estimated economic life of 11 years on the date of combination. 2. At December 31, 20x8, Pillow's management reviewed the amount attributed to goodwill and concluded goodwill was impaired and should be reduced to $14,000. Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders. 3. Pillow used the equity method in accounting for its investment in Sheet 4. Detailed analysis of receivables and payables showed that Pillow owed Sheet $9,000 on December 31, 20X8. 5. Assume that the Investment in Sheet Company at 1/1/X8 is $202,000. Required: a. Prepare all journal entries recorded by Pillow with regard to its investment in Sheet during 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) b. Prepare all consolidation entries needed to prepare a full set of consolidated financial statements for 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) c. Prepare a three-part consolidation worksheet as of December 31, 20X8. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)
Expert Answer:
Answer rating: 100% (QA)
Part A Journal entries recorded by Pillow Corporation 1 Cash 20000 Investment in Sheet Company Stock 20000 Record dividends from Sheet Company 20000 2... View the full answer
Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
Posted Date:
Students also viewed these accounting questions
-
Prepare all journal entries for 20X2 concerning the following data for a medical clinic that performs elective laser surgery that corrects vision. Such procedures are not covered by third-party...
-
Prepare all journal entries (budgetary and actual) required in all funds and the GCA-GLTL accounts to record the following transactions and events: 1. The county sold old equipmentoriginal cost...
-
Prepare all journal entries (budgetary and actual) required in all funds and the GCA and GLTL accounts to record the following transactions and events: 1. A state issued $50,000,000 of 4%, 20-year...
-
Suppose that in a wave of pessimism, housing prices fall by 10% across the entire economy. a. Has the stock of real assets of the economy changed? b. Are individuals less wealthy? c. Can you...
-
Naoko has these daily balances on his credit card for September's billing period. He paid his balance from the August billing in full. Two days @ $99.78 Fifteen days @ $315.64 Eleven days @ $515.64...
-
You are designing an FSM to keep track of the mood of four students working in the digital design lab. Each students mood is either HAPPY (the circuit works), SAD (the circuit blew up), BUSY (working...
-
Continuing Question 5, turn off the lag filter and use a notch filter to improve the performance. Simultaneously adjust Notch Freq and KVP to maximize KVP without inducing peaking in the closed-loop...
-
Hayes (2000) took a stratified sample of New York City food stores. The sampling frame consisted of 1408 food stores with at least 4000 square feet of retail space. The population of stores was...
-
Consider a reservoir filled with water of uniform density po and subject to the gravi- tational force. One side of the reservoir is confined by a dam wall of height h and width W, as shown in the...
-
1. Debug following Echo server and client program. Assume all packages are imported. No indentation errors. Do not focus on upper or lower cases. Hint: Three bugs in each file java file. Below are...
-
Gold Times runs an import-export business by procuring raw materials from one country and supplying finished goods, therefore must make foreign currency payments. Given global economic conditions,...
-
A new and different response to an offer. a. acceptance b. counteroffer c. invitation to tra de d. lapse of time e. mailbox r ule f. offeree g. offeror h. public of fer i. request f or a pr oposal j....
-
A contract whose meaning is not determined by the conduct of the parties. a. competent pa rty b. consideration c. divisible c ontract d. entire, or indivisible, contract e. executed c ontract f....
-
Land and articles permanently attached to it. a. bill of sale b. certifi cate of title c. condition s ubsequent d. condition pr ecedent e. estoppel f. fungible goods g. order bill of lading h....
-
A contract with several related parts, each dependent on the other parts for satisfactory performance. a. competent pa rty b. consideration c. divisible c ontract d. entire, or indivisible, contract...
-
Refer to P7.3 . If SA had only significant influence over SB, show how the journal entries will differ from P7.3 above. Data from P7.3 On 2 January 20x1, P Ltd paid $316,000 to acquire 160,000...
-
Evaluate the following n-dimensional integral by the Monte Carlo method L (x + x + . . . + x ) d V n (9.131) where the integration domain R,, is an n-dimensional unit hypercube defined by 0 x 1 for k...
-
A red card is illuminated by red light. What color will the card appear? What if its illuminated by blue light?
-
The trial balance data presented in P824 can be converted to reflect use of the cost method by inserting the following amounts in place of those presented for Bennett Corporation: Investment in Stone...
-
On January 1, 20X1, Alpha Corporation acquired all of Bravo Companys assets and liabilities by issuing shares of its $3 par value stock to the owners of Bravo Company in a business combination. Alpha...
-
A variable interest entity (VIE) is a structure frequently used for off-balance sheet financing. VIEs have become quite numerous in recent years and have been the subject of some controversy....
-
Using a financial calculator, solve for the unknowns in each of the following situations. a. On June 1, 2024, Holly Golightly purchases lakefront property from her neighbor, George Peppard, and...
-
Ed owns Oak Knoll Apartments. During the year, Fred, a tenant, moved to another state. Fred paid Ed \($1,000\) to cancel the two-year lease he had signed. Ed subsequently began renting the unit to...
-
In 2017, Harry and Mary purchased Series EE bonds, and in 2023 redeemed the bonds, receiving \($500\) of interest and \($1,500\) of principal. Their income from other sources totaled \($30,000.\)...
Study smarter with the SolutionInn App