Pirate Corporation acquired 60 percent ownership of Ship Company on January 1, 20X8, at underlying book...

  

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Pirate Corporation acquired 60 percent ownership of Ship Company on January 1, 20X8, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 40 percent of the book value of Ship Company. Accumulated depreciation on Buildings and Equipment was $77,000 on the acquisition date. Trial balance data at December 31, 20X8, for Pirate and Ship are as follows: Item Cash Accounts Receivable Inventory Buildings & Equipment Investment in Row Company Investment in Ship Company Cost of Goods Sold Depreciation Expense Interest Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Other Comprehensive Income from Ship Company (OCI)-Unrealized Gain on Investments Unrealized Gain on Investments (OCI) Sales Income from Ship Company Pirate Corporation Debit Credit $ 43,000 65,000 56,000 506,000 109,680 146,000 27,000 5,000 27,000 $984,680 $130,000 59,000 156,480 187,000 195,000 6,000 229,000 22,200 $984,680 Ship Company Debit $ 14,000 38,000 46,000 243,000 43,000 106,000 7,000 2,000 22, 200 $521, 200 Credit $ 84,000 15,000 102,200 99,000 59,000 10,000 152,000 $521,200 Additional Information Ship purchased stock of Row Company on January 1, 20x8, for $33,000 and classified the investment as available-for-sale securities. The value of Row's securities increased to $43,000 at December 31, 20X8. Required: a. Record all consolidation entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) b. Prepare a three-part consolidation worksheet for 20X8 in good form. (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.) Income Statement Sales Less: COGS Less: Depreciation expense Less: Interest expense. Income from Ship Company Consolidated net income. NCI in net income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance. Net income Less: Dividends declared Ending Balance Balance Sheet Cash Accounts receivable Inventory Buildings and equipment Less: Accumulated depreciation Investment in Row Company Investment in Ship Company Total Assets .. ---- Answer is not complete. PIRATE CORPORATION AND SUBSIDIARY Worksheet for Consolidated Financial Statements December 31, 20X8 Pirate Co. $ $ $ $ 0 $ 0 $ 0 $ 0 $ Ship Co. 0 0 0 S S S 0 S Consolidation Entries CR DR 0 0 $ 0 $ 0 $ S 0 0 0 0 Consolidated S S $ $ 0 0 0 0 Investment in Ship Company Total Assets Accounts payable Bonds payable Common stock Retained earnings Accumulated OCI NCI in NA of Ship Company Total Liabilities and Equity Other Comprehensive Income Accumulated other comprehensive income, 1/1/20X8 Other comprehensive income from Ship Company Unrealized gain on investments Other comprehensive income to NCI Accumulated Other Comprehensive Income, 12/31/20X8 Assets Accounts receivable Inventory $ $ Buildings and equipment Accumulated depreciation Investment in marketable securities $ Answer is not complete. PIRATE CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X8 0 $ 0 $ 0 $ 0 0 0 S 0 S 0 $ 0 $ 0 S 0 0 0 $ $ c. Prepare a consolidated balance sheet, income statement, and statement of comprehensive income for 20X8. (Amounts to be deducted should be indicated with a minus sign.) S 0 0 0 Pirate Corporation acquired 60 percent ownership of Ship Company on January 1, 20X8, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 40 percent of the book value of Ship Company. Accumulated depreciation on Buildings and Equipment was $77,000 on the acquisition date. Trial balance data at December 31, 20X8, for Pirate and Ship are as follows: Item Cash Accounts Receivable Inventory Buildings & Equipment Investment in Row Company Investment in Ship Company Cost of Goods Sold Depreciation Expense Interest Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Other Comprehensive Income from Ship Company (OCI)-Unrealized Gain on Investments Unrealized Gain on Investments (OCI) Sales Income from Ship Company Pirate Corporation Debit Credit $ 43,000 65,000 56,000 506,000 109,680 146,000 27,000 5,000 27,000 $984,680 $130,000 59,000 156,480 187,000 195,000 6,000 229,000 22,200 $984,680 Ship Company Debit $ 14,000 38,000 46,000 243,000 43,000 106,000 7,000 2,000 22, 200 $521, 200 Credit $ 84,000 15,000 102,200 99,000 59,000 10,000 152,000 $521,200 Additional Information Ship purchased stock of Row Company on January 1, 20x8, for $33,000 and classified the investment as available-for-sale securities. The value of Row's securities increased to $43,000 at December 31, 20X8. Required: a. Record all consolidation entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) b. Prepare a three-part consolidation worksheet for 20X8 in good form. (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.) Income Statement Sales Less: COGS Less: Depreciation expense Less: Interest expense. Income from Ship Company Consolidated net income. NCI in net income Controlling Interest in Net Income Statement of Retained Earnings Beginning balance. Net income Less: Dividends declared Ending Balance Balance Sheet Cash Accounts receivable Inventory Buildings and equipment Less: Accumulated depreciation Investment in Row Company Investment in Ship Company Total Assets .. ---- Answer is not complete. PIRATE CORPORATION AND SUBSIDIARY Worksheet for Consolidated Financial Statements December 31, 20X8 Pirate Co. $ $ $ $ 0 $ 0 $ 0 $ 0 $ Ship Co. 0 0 0 S S S 0 S Consolidation Entries CR DR 0 0 $ 0 $ 0 $ S 0 0 0 0 Consolidated S S $ $ 0 0 0 0 Investment in Ship Company Total Assets Accounts payable Bonds payable Common stock Retained earnings Accumulated OCI NCI in NA of Ship Company Total Liabilities and Equity Other Comprehensive Income Accumulated other comprehensive income, 1/1/20X8 Other comprehensive income from Ship Company Unrealized gain on investments Other comprehensive income to NCI Accumulated Other Comprehensive Income, 12/31/20X8 Assets Accounts receivable Inventory $ $ Buildings and equipment Accumulated depreciation Investment in marketable securities $ Answer is not complete. PIRATE CORPORATION AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X8 0 $ 0 $ 0 $ 0 0 0 S 0 S 0 $ 0 $ 0 S 0 0 0 $ $ c. Prepare a consolidated balance sheet, income statement, and statement of comprehensive income for 20X8. (Amounts to be deducted should be indicated with a minus sign.) S 0 0 0