Question

Mill Corporation acquired 100 percent ownership of Roller Company on January 1, 20X8, for $128,000. At that date, the fair value of Roller's buildings and equipment was $20,000 more than book value. Accumulated depreciation on this date was $30,000. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Mill concluded at December 31, 20X8 that goodwill involved in its acquisition of Roller shares had been impaired and the correct carrying value was $2,500. No additional impairment occurred in 20X9. Trial balance data for Mill and Roller on December 31, 20X9, are as follows:

	Mill Corporation			Roller Company
Item	Debit	Credit		Debit	Credit
Cash	$45,500			$32,000
Accounts Receivable	85,000			14,000
Inventory	97,000			24,000
Land	50,000			25,000
Buildings & Equipment	350,000			150,000
Investment in Roller	142,500
Cost of Goods Sold	145,000			$114,000
Wage Expense	35,000			20,000
Depreciation Expense	25,000			10,000
Interest Expense	12,000			4,000
Other Expenses	23,000			16,000
Dividends Declared	30,000			20,000
Accumulated Depreciation		$170,000			$50,000
Accounts Payable		51,000			15,000
Wages Payable		14,000			6,000
Notes Payable		150,000			50,000
Common Stock		200,000			60,000
Retained Earnings		131,000			48,000
Sales		290,000			200,000
Income from Subsidiary		34,000
	$1,040,000	$1,040,000		$429,000	$429,000

Required 1. Prepare all eliminating entries needed to prepare a three-part consolidation worksheet as of December 31, 20X9. 2. Prepare a three-part consolidation worksheet for 20X9. 3. Prepare a consolidated balance sheet, income statement, and retained earnings statement for 20X9.

Answer 1