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EXERCISE 4‐3 Workpaper Eliminating Entries, Equity Method LO 5 At the beginning of 2014, Presidio Company...
EXERCISE 4‐3 Workpaper Eliminating Entries, Equity Method LO 5 At the beginning of 2014, Presidio Company purchased 95% of the common stock of Succo Company for $494,000. On that date, Succo Company's stockholders' equity consisted of the following: Common stock $300,000 Other contributed capital 100,000 Retained earnings 120,000 Total $520,000 During 2022, Succo Company reported net income of $40,000 and distributed dividends in the amount of $19,000. Succo Company's retained earnings balance at the end of 2021 amounted to $160,000. Presidio Company uses the equity method. Required: Prepare in general journal form the workpaper entries necessary in the compilation of consolidated financial statements on December 31, 2022. Explain why the partial and complete equity methods would result in the same entries in this instance.
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Workpaper Eliminating Entries, Equity Method. At the beginning of 2009, Presidio Company purchased 95% of the...
Workpaper Eliminating Entries, Equity
Method.
At the beginning of 2009, Presidio Company purchased 95% of the
common stock of Succo Company for $494,000. On that date, Succo
Company's stockholders' equity consisted of the following:
Common stock $300,000
Other Contributed Capital $100,000
Retained Earnings $120,000
Total: $520,000
During 2017, Succo Company reported net income of $40,000 and
distributed dividends in the amount of $19,000. Succo Company's
retained earnings balance at the end of 2016 amounted to $160,000.
Presidio Company uses...
EXERCISE 4‐2 Workpaper Eliminating Entries, Cost Method LO 5 Park Company purchased 90% of the stock...
EXERCISE 4‐2 Workpaper Eliminating Entries, Cost Method LO 5
Park Company purchased 90% of the stock of Salt Company on January
1, 2019, for $465,000, an amount equal to $15,000 in excess of the
book value of equity acquired. This excess payment relates to an
undervaluation of Salt Company's land. On the date of purchase,
Salt Company's retained earnings balance was $50,000. The remainder
of the stockholders' equity consists of no‐par common stock. During
2023, Salt Company declared dividends in...
EXERCISE 5-4 Allocation of Cost and Workpaper Entries at Date of Acquisition LO 2 On January...
EXERCISE 5-4
Allocation of Cost and Workpaper Entries at Date of Acquisition
LO 2
On January 1, 2020, Porter Company purchased an 80% interest in
Salem Company for $260,000. On this date, Salem Company had common
stock of $207,000 and retained earnings of $130,500.
An examination of Salem Company’s balance sheet revealed the
following comparisons between book and fair values:
Book Value
Fair Value
Inventory
$ 30,000
$ 35,000
Other current assets
50,000
55,000
Equipment
300,000
350,000
Land
200,000
200,000...
EXERCISE 5-2 End of the Year of Acquisition Workpaper Entries LO 1 LO 9 On January...
EXERCISE 5-2 End of the Year of Acquisition Workpaper Entries LO
1 LO 9
On January 1, 2020, Payne Corporation purchased a 75% interest
in Salmon Company for $585,000. A summary of Salmon Company’s
balance sheet on that date revealed the following: Book Value Fair
Value Equipment $525,000 $705,000 Other assets 150,000 150,000
$675,000 $855,000 Liabilities $ 75,000 $ 75,000 Common stock
225,000 Retained earnings 375,000 $675,000 The equipment had
an original life of 15 years and has a remaining...
Workpaper Entries and Consolidated Net Income for Two Years, Cost Method LO 6 LO 3 LO...
Workpaper Entries and Consolidated Net Income for Two Years,
Cost Method LO 6 LO 3 LO 5 On January 1, 2014, Palmero Company
purchased an 80% interest in Santos Company for $2,800,000, at
which time Santos Company had retained earnings of $1,000,000 and
capital stock of $500,000. On the date of acqui- sition, the fair
value of the assets and liabilities of Santos Company was equal to
their book value, except for prop- erty and equipment (net), which
had a...
Workpaper Entries and Consolidated Net Income for Two Years, Cost Method LO 6 LO 3 LO...
Workpaper Entries and Consolidated Net Income for Two Years,
Cost Method LO 6 LO 3 LO 5 On January 1, 2014, Palmero Company
purchased an 80% interest in Santos Company for $2,800,000, at
which time Santos Company had retained earnings of $1,000,000 and
capital stock of $500,000. On the date of acquisition, the fair
value of the assets and liabilities of Santos Company was equal to
their book value, except for property and equipment (net), which
had a fair value...
Equity Method and Eliminating Entries, First Year On January 1, 2020, Playtel Inc. acquired all of...
Equity Method and Eliminating Entries, First Year
On January 1, 2020, Playtel Inc. acquired all of the stock of
San Jose Cable for $250 million in cash. At the date of
acquisition, Playtel’s shareholders’ equity accounts were as
follows (in thousands):
Common stock, $1 par
$5,000
Additional paid-in capital
25,000
Retained deficit
(1,000)
Treasury stock
(800)
Total
$28,200
Both companies have a December 31 year-end. At the date of
acquisition, San Jose’s reported net assets had book values
approximating fair...
Acquisition Cost, Equity Method, Eliminating Entries, Second Year Peak Entertainment acquires all of the stock of...
Acquisition Cost, Equity Method, Eliminating Entries,
Second Year
Peak Entertainment acquires all of the stock of Saddlestone Inc.
on January 1, 2020. In preparing to consolidate the trial balances
of Peak and Saddlestone at December 31, 2021 (two years after the
acquisition), you assemble the following information:
Date-of-acquisition information:
• Value of stock given up to acquire Saddlestone:
$20,000,000.
• Direct merger costs: $250,000.
• Saddlestone’s shareholders’ equity: $7,200,000, consisting of
capital stock, $2,000,000; retained earnings, $5,000,000;
accumulated other comprehensive...
Required information PA4-4 Identifying and Preparing Adjusting Journal Entries [LO 4-1, LO 4-2, LO 4-3, LO...
Required information
PA4-4 Identifying and Preparing Adjusting Journal Entries [LO
4-1, LO 4-2, LO 4-3, LO 4-6]
[The following information applies to the questions
displayed below.]
Val’s Hair Emporium operates a hair salon. Its unadjusted trial
balance as of December 31, 2018, follows, along with information
about selected accounts.
Account Names
Debit
Credit
Further Information
Cash
$
2,800
As reported on December 31 bank statement.
Supplies
3,300
Based on count, only $800 of supplies still exist.
Prepaid Rent
3,000
This...
Integration Exercise 9 Master Budgeting. LO 8-2, LO 8-3, LO 8-4, LO 8-5, LO 8-6, LO...
Integration Exercise 9 Master Budgeting. LO 8-2, LO 8-3, LO 8-4,
LO 8-5, LO 8-6, LO 8-7, LO8-9, LO 8-10
Endless Mountain Company manufactures a single product that is
popular with recreation enthusiasts. The company sells its product
to retailers throughout the quadrant of the United States. It is in
the process of creating a master budget for reports a balance sheet
as December 31, 2016 as follows:
Endless Mountain Company
Balance Sheet
December 31, 2016
Assets
Current Assets:
Cash...
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