Public Corporation acquired 90 percent of Station Company s voting common stock on January 1, 20X1,...
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Public Corporation acquired 90 percent of Station Company s voting common stock on January 1, 20X1, for $507,600. At the time of the combination, Station reported common stock outstanding of $126,000 and retained earnings of $388,000, and the fair value of the noncontrolling interest was $56,400. The book value of Station s net assets approximated market value except for patents that had a market value of $50,000 more than their book value. The patents had a remaining economic life of five years at the date of the business combination. Station reported net income of $70,000 and paid dividends of $21,000 during 20X1. Required: a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method in accounting for its investment? Balance in investment account b. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. (If no entry is required for a transaction/event, select No journal entry required in the first account field.) view transaction list Consolidation Worksheet Entries A B с Record the basic consolidation entry. Event 1 Note: Enter debits before credits. Accounts Debit Credit Public Corporation acquired 90 percent of Station Company s voting common stock on January 1, 20X1, for $507,600. At the time of the combination, Station reported common stock outstanding of $126,000 and retained earnings of $388,000, and the fair value of the noncontrolling interest was $56,400. The book value of Station s net assets approximated market value except for patents that had a market value of $50,000 more than their book value. The patents had a remaining economic life of five years at the date of the business combination. Station reported net income of $70,000 and paid dividends of $21,000 during 20X1. Required: a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method in accounting for its investment? Balance in investment account b. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. (If no entry is required for a transaction/event, select No journal entry required in the first account field.) view transaction list Consolidation Worksheet Entries A B с Record the basic consolidation entry. Event 1 Note: Enter debits before credits. Accounts Debit Credit
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Answer rating: 100% (QA)
Cost of investment acquired 507600 Dividend Received Less 18900 Income ... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III
Posted Date:
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