Question

Mill Corporation acquired 100 percent ownership of Roller Company on January 1, 20X8, for $118,000. At that date, the fair value of Roller’s buildings and equipment was $19,000 more than the book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, Mill’s management concluded at December 31, 20X8, that goodwill involved in its acquisition of Roller shares had been impaired and the correct carrying value was $2,400.

Trial balance data for Mill and Roller on December 31, 20X8, are as follows:

a.	Prepare the following consolidating 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.)

    

		Mill Corporation								Roller Company
Item	Debit				Credit				Debit					Credit
Cash		$	20,500							$	22,000
Accounts Receivable			90,000								13,000
Inventory			110,000								26,000
Land			35,000								16,000
Buildings & Equipment			359,000								160,000
Investment in Roller Co. Stock			118,500
Cost of Goods Sold			128,000								113,000
Wage Expense			35,000								19,000
Depreciation Expense			21,000								6,000
Interest Expense			8,000								5,000
Other Expenses			9,500								6,000
Dividends Declared			37,000								22,000
Accumulated Depreciation						$	138,000							$	29,000
Accounts Payable							27,000								7,000
Wages Payable							8,000								5,000
Notes Payable							132,000								97,000
Common Stock							199,000								55,000
Retained Earnings							184,000								35,000
Sales							261,000								180,000
Income from Subsidiary							22,500
		$	971,500			$	971,500			$	408,000			$	408,000

No	Event	Accounts	Debit	Credit
1	1	Common stock	55,000
		Retained earnings	35,000
		Income from Roller Company
		Dividends declared		22,000
		Investment in Roller Company
2	2	Depreciation expense
		Goodwill impairment loss
		Income from Roller Company
3	3	Buildings and equipment
		Goodwill
		Accumulated depreciation
		Investment in Roller Company
4	4	Accumulated depreciation
		Buildings and equipment

Answer 1