Question

S Company's net income was earned evenly throughout the year. Both companies declared and paid their dividends on December 31, 20X8. P uses the fully adjusted equity method in accounting for its investment in S.

Please help me prepare the elimination entries needed to complete full consolidation worksheet for 20X8

P Corporation acquired 70 percent ownership of Company on January 1, 20X6, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 30 percent of the book value of S. On January 1, 20X8, Portfolio sold 1,000 shares of S Company for $20,000 to A Corporation and recorded a $5,000 gain. Trial balances for the companies on December 31, 20X8, contain the following data: S Company Credit Credit P Corp. Debit 70,000 60,000 80,000 Debit 20,000 40,000 60,000 400,000 200,000 114,000 180,000 90,000 40,000 20,000 17,000 25,000 30,000 20,000 Cash Accounts Receivable Inventory Buildings and Equipment Investment in s Cost of Goods Sold Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock ($5 par) Additional Paid-In Capital Retained Earnings Sales Gain on Sale of S Company Stock Income from S Company $ 80,000 60,000 40,000 100,000 30,000 40,000 150,000 50,000 75,000 200,000 300,000 10,000 90,000 200,000 5,000 36,000 $ 986,000 $ 986,000 $ 480,000 $ 480,000

Answer 1

Date	Particulars	Debit ($)	Credit ($)
Dividend income	14,000
Non controlling interest of S co.	6,000
Dividend declared	20,000
(To record the dividend consolidation entry)
Date	Particulars	Debit ($)	Credit ($)
Common stock	60,000
Retained earnings	90,000
Investment in S Co. Stock	105,000
Non controlling interest of	45,000
(To record investment consolidation entry)
Date	Particulars	Debit ($)	Credit ($)
Bonds payable	100,000
Loss on bonds retirement	18,200
Discount on bond payable	4,200
Investment in S co.	114,000
(To record the elimination of inter company bond holding)
Explanation Calculations: Date Particulars Debit ($) Credit ($) Dividend income =20000*70% Non controlling interest of S co. =20000*30% Dividend declared 20000 (To record the dividend consolidation entry) Date Particulars Debit ($) Credit ($) Common stock =50000+10000 Retained earnings 90000 Investment in S Co. Stock =150000*70% Non controlling interest of =150000*30% (To record investment consolidation entry) Date Particulars Debit ($) Credit ($) Bonds payable 100000 Loss on bonds retirement =+G22+G23-F20 Discount on bond payable =+(114000-100000)*30% Investment in S co. 114000 (To record the elimination of inter company bond holding)