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Pepper Company acquired 90 percent of Salt Company's stock at underlying book value on January 1,...
Pepper Company acquired 90 percent of Salt Company's stock at underlying book value on January 1, 20X8. At that date, the fair value of the non-controlling interest was equal to 10 percent of the book value of Salt Company. Salt Co. sold equipment to Pepper Co. for a $360,000 on December 31, 20X8. Salt Co. had originally purchased the equipment for $400,000 on January 1, 20x5, with a useful life of 10 years and no salvage value. At the time of the purchase, Pepper Co. estimated that the equipment still had the same remaining useful life. Both companies use straight-line depreciation. Pepper sold land costing $90,000 to Salt Company on June 28, 20X9, for $122,000.
a)Prepare Pepper’s journal entries related to inter-company sale at December 31, 20X9.
b)Prepare the consolidation entries that related to inter-company sale of land at December 31, 20X9.
c) Prepare the consolidation entries that related to inter-company sale of equipment at December 31, 20X9.
Solutions
ekkarill92 answered 7 months agoRelated Solutions
Pepper Company acquired 80 percent of Salt Company's stock at underlying book value on January 1,...
Pepper Company acquired 80 percent of Salt Company's stock at
underlying book value on January 1, 2018. Pepper Company acquired
80 percent of Salt Company's stock at underlying book value on
January 1, 2018. At that date, Salt reported common stock
outstanding of $1,050,000 and retained earnings of $840,000; the
fair value of the noncontrolling interest was equal to 20 percent
of the book value of Salt Company. Salt Co. sold equipment to
Pepper Co. for a $720,000 on December...
Pepper Company acquired 80 percent of Salt Company's stock at underlying book value on January 1,...
Pepper Company acquired 80 percent of Salt Company's stock at
underlying book value on January 1, 2018. Pepper Company acquired
80 percent of Salt Company's stock at underlying book value on
January 1, 2018. At that date, Salt reported common stock
outstanding of $1,050,000 and retained earnings of $840,000; the
fair value of the noncontrolling interest was equal to 20 percent
of the book value of Salt Company. Salt Co. sold equipment to
Pepper Co. for a $720,000 on December...
Pepper Company acquired 80 percent of Salt Company's stock at underlying book value on January 1,...
Pepper Company acquired 80 percent of Salt Company's stock at
underlying book value on January 1, 2018. At that date, Salt
reported common stock outstanding of $1,050,000 and retained
earnings of $840,000; the fair value of the noncontrolling interest
was equal to 20 percent of the book value of Salt Company. Salt Co.
sold equipment to Pepper Co. for a $720,000 on December 31, 2018.
Salt Co. had originally purchased the equipment for $800,000 on
January 1, 2015, with a...
Question 10 Pepper Company acquired 80 percent of Salt Company's stock at underlying book value on...
Question 10
Pepper Company acquired 80 percent of Salt Company's stock at
underlying book value on January 1, 2018. At that date, Salt
reported common stock outstanding of $1,050,000 and retained
earnings of $840,000; the fair value of the noncontrolling interest
was equal to 20 percent of the book value of Salt Company. Salt Co.
sold equipment to Pepper Co. for a $720,000 on December 31, 2018.
Salt Co. had originally purchased the equipment for $800,000 on
January 1, 2015,...
On January 1, 20X8, Potter Corporation acquired 90 percent of Shoemaker Company's voting stock, at underlying book value.
On January 1, 20X8, Potter Corporation acquired 90 percent of
Shoemaker Company's voting stock, at underlying book value. The
fair value of the noncontrolling interest was equal to 10 percent
of the book value of Shoemaker at that date. Potter uses the fully
adjusted equity method in accounting for its ownership of
Shoemaker. On December 31, 20X9, the trial balances of the two
companies are as follows:Potter CompanyShoemaker CorporationDebitCreditDebitCreditCurrent Assets$200,000$140,000Depreciable Assets350,000250,000Investment in Shoemaker Corp.162,000Depreciation Expense27,00010,000Other Expenses95,00060,000Dividends Declared20,00010,000Accumulated Depreciation$118,000$80,000Current Liabilities100,00080,000Long-Term Debt100,00050,000Common...
Peanut Company acquired 75 percent of Snoopy Company's stock at underlying book value on January 1,...
Peanut Company acquired 75 percent of Snoopy Company's stock at
underlying book value on January 1, 20X8. At that date, the fair
value of the noncontrolling interest was equal to 25 percent of the
book value of Snoopy Company. Snoopy Company reported shares
outstanding of $350,000 and retained earnings of $100,000. During
20X8, Snoopy Company reported net income of $60,000 and paid
dividends of $3,000. In 20X9, Snoopy Company reported net income of
$90,000 and paid dividends of $15,000. The...
Peanut Company acquired 75 percent of Snoopy Company's stock at underlying book value on January 1,...
Peanut Company acquired 75 percent of Snoopy Company's stock at
underlying book value on January 1, 20X8. At that date, the fair
value of the noncontrolling interest was equal to 25 percent of the
book value of Snoopy Company. Snoopy Company reported shares
outstanding of $350,000 and retained earnings of $100,000. During
20X8, Snoopy Company reported net income of $60,000 and paid
dividends of $3,000. In 20X9, Snoopy Company reported net income of
$90,000 and paid dividends of $15,000. The...
On January 1, 20X4, Pony Company acquired 25% of Stallion Company's common stock at underlying book...
On January 1, 20X4, Pony Company acquired 25% of Stallion
Company's common stock at underlying book value of $200,000.
Stallion has 80,000 shares of $10 par value, 6 percent cumulative
preferred stock outstanding. No dividends are in arrears. Stallion
reported net income of $270,000 for 20X4 and paid total dividends
of $140,000. Pony uses the equity method to account for this
investment.
Based on the preceding information, what amount of investment
income will Pony company report from its investment in...
On January 1, 20X9, Timber Company acquired 25% of Johnson Company's common stock at underlying book...
On January 1, 20X9, Timber Company acquired 25% of Johnson
Company's common stock at underlying book value of $200,000.
Johnson reported net income of $270,000 for 20X9 and paid total
dividends of $140,000. Timber uses the equity method to account for
this investment.
What amount would be reported by Timber Company as the balance
in its investment account on December 31, 20X9?
A. $200,000
B. $220,500
C. $232,500
D. $255,500
*Please show your computations for the answer.
On January 1, 2017, Travers Company acquired 90 percent of Yarrow Company's outstanding stock for $918,000....
On January 1, 2017, Travers Company acquired 90 percent of
Yarrow Company's outstanding stock for $918,000. The 10 percent
noncontrolling interest had an assessed fair value of $102,000 on
that date. Any acquisition-date excess fair value over book value
was attributed to an unrecorded customer list developed by Yarrow
with a remaining life of 15 years.
On the same date, Yarrow acquired an 80 percent interest in
Stookey Company for $520,000. At the acquisition date, the 20
percent noncontrolling interest...
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