In: Accounting
3) The December 31, 2019, trial balances for Paul Corporation and its subsidiary Stuart are listed below.
Paul Corporation Stuart Company
Debit Credit Debit Credit
Cash $ 30,000 $ 8,000
Receivables (net) 13,000 12,000
Inventory, 1/1 12,000 10,000
Investment in S 150,000
Plant and equipment (net) 250,000 195,000
Land 100,000 80,000
Accounts payable $ 30,000 $ 10,000
Other liabilities 85,000 100,000
Common stock ($10 par) 250,000 100,000
Retained earnings, 1/1 168,000 84,000
Dividends declared 15,000 20,000
Sales 132,000 91,000
Dividend income 15,000
Purchases 60,000 30,000
Other expenses 50,000 _______ 30,000 _______
$680,000 $680,000 $385,000 $385,000
Inventory, 12/31 $15,000 $12,000
A. Prepare the journal entries found on Paul’s books for 2019
To record P’s share of S’s dividends |
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B. Prepare the workpaper entries for 2019
To establish reciprocity (convert to equity) |
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To eliminate P’s share of S’s equity |
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To allocate the difference between implied and book value |
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To eliminate P’s share of S’s dividends |
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