Question

Exercise 4-7 On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of Sales Company for $361,700. On that date, Sales Company's stockholders' equity consisted of common stock, $93,900; other contributed capital, $37,000; and retained earnings, $148,500. Pert Company paid more than the book value of net assets acquired because the recorded cost of Sales Company's land was significantly less than its fair value. During 2014 Sales Company earned $134,900 and declared and paid a $50,500 dividend. Pert Company used the partial equity method to record its investment in Sales Company. Assume that during 2015 Sales Company earned $202,100 and declared and paid a $50,500 dividend.

Answer 1

Enscooo! b. poopave the wook papeo Carloating entoes for a wook papers December 31, 2015 1. Elim Pole Pokedcompay foansactions No edoy 2. Elim prate subsedao, Pacome recoorded by povest Isod Account titles & explanation Debit col credit ($) Equity Pncome AIC DO 128860 TO Investment in subsidion 128,860 3. El note diuidends Subsidady paid to parent SNO Account totos & explanation Debit Cordet (4) Investment ins ALC DO 42,925 TO Dividends doctroid-Soth 42,925 - Pasy AC H. Elle poole subsed fagy equity 500 Account fores e explanalton ebr+ Cadet Common Stock - Subsidiad, AICOD 43,900 other contofbered Capital Subsolo 37,000 AIC DO Retorned camning-Subod YAK DO 148,500 off betweon empired & BU PIC DO 146,129 Drvestmenden Subsidiary Ak TO Non contoolling Potest Al (to Weat elephate Povestmena po SubsPolacy € Cale con controlling Prevest) 5. Allocale dffcedence between Pmpired & book 560 Account titles & explanaltos Debit Cact land AIC DO 146, 129 TO ditt between implied EBV 361,700 63829 146,129