Question: using the straight-line method find 1)Worksheet elimination entries necessary to prepare consolidated financial statements for 2018 2) Worksheet elimination entries necessary to prepare consolidated financial

using the straight-line method find

1)Worksheet elimination entries necessary to prepare consolidated financial statements for 2018

2) Worksheet elimination entries necessary to prepare consolidated financial statements for 2019

On January 1, 2018, Manchester Company acquired 60% of the outstanding common stock of United Company at the book value of the shares acquired and accounts for the investment using the fully adjusted equity method. On that date, the fair value of NCI was equal to 40% of book value of United. At the time of purchase, United had common stock of $1,000,000 outstanding and retained earnings of $800,000. On December 31, 2018, Manchester purchased 50% of United's bonds outstanding which were originally issued on January 1, 2015, at 99. The total bond issue has a face value of $600,000, pays 10% interest annually, and has a 10-year maturity. Any premium or discount is amortized on a straight-line basis. Manchester paid $306,000 for its investment in United's bonds and intends to hold the bonds until maturity. Income and dividends for Manchester and United for 2018 and 2019 are as follows: Manchester United Operating Income Dividends Net Income Dividends 2018 $1,600,000 $400,000 $ 600,000 $300,000 2019 1,200,000 400,000 1,000,000 300,000

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