Consolidation entry I would include A. A credit to Investment in Sledge for $20,000 B. A debit to Equity in Income of Sledge for $15,100 C. A credit to Investment in Sledge for $10,600 D. A debit to Buildings for $25,000
Added by Lorena S.
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Consolidation entries are made to eliminate the effects of intercompany transactions and to present the financial statements of a parent company and its subsidiaries as a single entity. Show more…
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Company P holds 70 percent of the voting shares of Company S. During 20X8, Company S sold land with a book value of $125,000 to Company P for $150,000. Company P continues to hold the land at the end of the year. The companies file separate tax returns and are subject to a 40 percent tax rate. Assume that Company P uses the fully adjusted equity method in accounting for its investment in Company S. Use the information given, but also assume that Company P holds the land at the end of 20X9. The consolidating entry relating to the intercorporate sale of land to be entered in the consolidation worksheet prepared at the end of 20X9 will include: Multiple Choice a debit to Investment in Company S for $7,500. a debit to Noncontrolling Interest for $4,500. a credit to Land for $150,000. a credit to Land for $15,000. (WHICH ONE?)
Akash M.
Lowell Co. acquired 100% of Boston, Inc. on January 1, 2017. On that date, Boston had land with a book value of $42,000 and a fair value of $52,000. Also, on the date of acquisition, Boston had a building with a book value of $200,000 and a fair value of $390,000. Boston had equipment with a book value of $350,000 and a fair value of $280,000. Both companies use the same depreciation policy, that the building had a 10-year remaining useful life and the equipment had a 5-year remaining useful life. On December 31, 2020, the two companies have the following assets: Lowell Boston BV FV BV FV Land 50,000 60,000 32,000 45,000 Building 300,000 500,000 120,000 234,000 Equipment 600,000 390,000 70,000 56,000 When preparing the consolidation [A] entry to adjust the Buildings on December 31, 2020, Lowell should debit the building for what?
Manasvee S.
Question 1: Equity Method for Investments (10 points) On July 1, 2020, the Marshal Corporation Acquired 30% of the common stock of the Delta Manufacturing Inc. for $81,000,000 in cash and intends to hold this investment for long time. On that date the Balance Sheet of Delta was as follows: Assets Current assets 165,000,000 Machines 230,000,000 Buildings (net of Acc. Depreciation) 460,000,000 Total Assets $855,000,000 Liabilities and Shareholders' Equity Current Liabilities 95,000,000 Long-Term Debt 640,000,000 Equity (total) 120,000,000 Total Liabilities and SHE $855,000,000 Delta distributed cash dividends of $50,000,000 on 10/1/2020 and Reported net income of $80,000,000 on 12/31/2020. Marshal uses the equity method for this investment. All assets of Delta book values are the same as market value except the buildings has a market value of $560,000,000. Delta depreciates fixed assets over 10 years straight line. Required: A. Prepare the journal entries for this investment by Marshal during the year ended 12/31/2020. and the general ledger account of this investment on 12/31/2020. B. Was there any goodwill considered in the purchase price and how much? C. Make the necessary adjustment needed for Marshal to adjust investment income for the market value difference of the buildings.
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