Pele Corporation purchased 95% of Soccer Company for $342,000 on January 1, 2009 when Soccer Corporation's...

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Pele Corporation purchased 95% of Soccer Company for $342,000 on January 1, 2009 when Soccer Corporation's retained earnings were $140,000. On January 1, 2011 Pele Corporation and Soccer Company reported the following equity account balances: Pele Corporation $300,000 80,000 240,000 Soccer Company $100,000 120,000 190,000 Equity Item Common Stock Other Contributed Capital Retained Earnings During the year 2011, Pele Corporation made intercompany sale of inventory to Soccer Company amounting to $280,000 with a markup of 20% on selling price. The January 1, 2011 inventory of Soccer Company includes $160,000 of profit recorded by Pele Corporation on 2010 sales. The ending inventory of Soccer Company includes goods purchased for $60,000 from Pele Corporation during 2011. On December 31, 2011 Soccer Company reported net income of $56,000 and declared dividend of $38,000. Pele Corporation uses the cost method to record its investments in Soccer Company. Required Prepare, in general journal form, all workpaper eliminating entries necessary to consolidate the financial statements on December 31, 2011. Pele Corporation purchased 95% of Soccer Company for $342,000 on January 1, 2009 when Soccer Corporation's retained earnings were $140,000. On January 1, 2011 Pele Corporation and Soccer Company reported the following equity account balances: Pele Corporation $300,000 80,000 240,000 Soccer Company $100,000 120,000 190,000 Equity Item Common Stock Other Contributed Capital Retained Earnings During the year 2011, Pele Corporation made intercompany sale of inventory to Soccer Company amounting to $280,000 with a markup of 20% on selling price. The January 1, 2011 inventory of Soccer Company includes $160,000 of profit recorded by Pele Corporation on 2010 sales. The ending inventory of Soccer Company includes goods purchased for $60,000 from Pele Corporation during 2011. On December 31, 2011 Soccer Company reported net income of $56,000 and declared dividend of $38,000. Pele Corporation uses the cost method to record its investments in Soccer Company. Required Prepare, in general journal form, all workpaper eliminating entries necessary to consolidate the financial statements on December 31, 2011.

Answer rating: 100% (QA)

1 Date Account Dr Cr Retained earnings soccer 56000 common stock so... View the full answer