ZuoTi.Pro
Question

9-3       Prentice Company, who owns an 80% interest in Steffey Company, purchased $2,000,000 of Steffey’s 8%...

9-3       Prentice Company, who owns an 80% interest in Steffey Company, purchased $2,000,000 of Steffey’s 8% bonds at 106 on December 31, 2010. The bonds pay interest on January 1 and July 1 and mature on December 31, 2013. Prentice Company uses the cost method to account for its investment in Steffey. Selected balances from December 31, 2010 accounts of the two companies are as follows:

                                                                            Prentice                           _____Steffey____

            Investment in Steffey 8% bonds             $2,120,000                                $       ----

            Bond discount                                         ----                                               300,000

            Interest payable                                        ----                                               800,000

            8% bonds payable                                    ----                                        20,000,000

            Interest expense                                       ----                                            1,700,000

            Gain or loss on constructive

    retirement of bonds                               ----                                                  ----

            Required:

Prepare in general journal form the workpaper eliminations related to the bonds to consolidated the financial statements of Prentice and its subsidiary for the year ended December 31, 2010 and 2011.

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Danticula Delbi ,, 20, ooo To Dis count o bonds ,120, ooo + 300,000-3,000, 000 : Sơn bon 2011 IMMİdd bods A intoreat : 2,17o, oo 170,000 + 850, ooo - 2,1 20,๐๐๐

0 0
Add a comment
Know the answer?
Add Answer to:
9-3       Prentice Company, who owns an 80% interest in Steffey Company, purchased $2,000,000 of Steffey’s 8%...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • On January 1 2010, People Company acquired an 80% interest in Soft Co mpany for $1,000,000....

    On January 1 2010, People Company acquired an 80% interest in Soft Co mpany for $1,000,000. On that date Soft Company had retained earnings of $200,000 and common stock of $800,000. The book values of assets and liabilities were equal to fair values except for the following: Book Value Fair Value Equipment (net) 320,000 520,000 The equipment had an estimated remaining useful life of 5 years. Soft Company reported net income of $30,000 in 2010 and $40,000 in 2011. Dividends...

  • Consolidation worksheet for gain on constructive retirement of subsidiary’s debt with no AAP—Equity method Assume that...

    Consolidation worksheet for gain on constructive retirement of subsidiary’s debt with no AAP—Equity method Assume that a Parent company acquires a 80% interest in its Subsidiary on January 1, 2015. On the date of acquisition, the fair value of the 80 percent controlling interest was $640,000 and the fair value of the 20 percent noncontrolling interest was $160,000. On January 1, 2015, the book value of net assets equaled $800,000 and the fair value of the identifiable net assets equaled...

  • Sub Company is an 80%-owned subsidiary of Parent Company. Company was purchased on Jan stockholders' equity of...

    Sub Company is an 80%-owned subsidiary of Parent Company. Company was purchased on Jan stockholders' equity of $325,000. The interest in Sub uary 1, 2010 for $310,000 cash. At that date, Sub had 000. The excess price was attributed to equipment with a olidated trial ely ,0oodwill The following are comparative o consolidated trial balances 2010 Cash $ 17,000 60,000 100,000 1,500,000J (540,000) S 27,750 80,000 150,000 675,000 (640,000) 122,250 36,000 104,000) 200,000) (75,500) Accounts receivable PP&E 3r 25,000 31...

  • Exercise 3-6 On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The...

    Exercise 3-6 On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The balance sheet of Price Company and the consolidated balance sheet on December 3, 2013, were as follows: Price Company Consolidated Cash $23,140 $40,992 Accounts receivable 36,350 52,500 Inventory 123,490 151,399 Investment in Shipley Company 216,430 —0— Plant and equipment (net) 174,540 331,390 Land 110,290 223,723    Total $684,240 $800,004 Accounts payable $42,480 $120,050 Note payable 99,100 99,100 Noncontrolling interest in Shipley Company —0— 38,194 Common...

  • Exercise 4-5 On January 1, 2014, Plate Company purchased a 90% interest in the common stock...

    Exercise 4-5 On January 1, 2014, Plate Company purchased a 90% interest in the common stock of Set Company for $597,840, an amount $20,400 in excess of the book value of equity acquired. The excess relates to the understatement of Set Company's land holdings. Excerpts from the consolidated retained earnings section of the consolidated statements workpaper for the year ended December 31, 2014, follow: 1/1/14 retained earnings Net income from above Set Company 171,200 119,700 (50,300 ) 240,600 Consolidated Balances...

  • Cairns owns 70 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired...

    Cairns owns 70 percent of the voting stock of Hamilton, Inc. The parent’s interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Cairns uses the equity method in its internal records to account for its investment in Hamilton. On January 1, 2014, Hamilton sold $1,200,000 in 10-year bonds to the public at 110. The bonds had a cash interest rate of 9...

  • Assume that a parent company owns 75 percent of its subsidiary. On January 1, 2016, the...

    Assume that a parent company owns 75 percent of its subsidiary. On January 1, 2016, the parent company had a $100,000 (face value) 8 percent bond payable outstanding with a carrying value of $94,000. Several years ago, the bond was originally issued to an unaffiliated company for 92% of par value. On January 1, 2016, the subsidiary acquired the bond for $91,000. During 2016, the parent company reported $400,000 of (pre-consolidation) income from its own operations (prior to any equity...

  • Exercise 3-6 On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The...

    Exercise 3-6 On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The balance sheet of Price Company and the consolidated balance sheet on December 3, 2013, were as follows: Price Company Consolidated Cash $22,960 $40,015 Accounts receivable 31,920 59,330 Inventory 121,760 175,450 Investment in Shipley Company 193,560 —0— Plant and equipment (net) 199,520 320,530 Land 123,190 205,993    Total $692,910 $801,318 Accounts payable $41,610 $115,860 Note payable 97,900 97,900 Noncontrolling interest in Shipley Company —0— 34,158 Common...

  • Exercise 3-6 On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The...

    Exercise 3-6 On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The balance sheet of Price Company and the consolidated balance sheet on December 3, 2013, were as follows: Price Company Consolidated Cash $23,140 $40,992 Accounts receivable 36,350 52,500 Inventory 123,490 151,399 Investment in Shipley Company 216,430 —0— Plant and equipment (net) 174,540 331,390 Land 110,290 223,723    Total $684,240 $800,004 Accounts payable $42,480 $120,050 Note payable 99,100 99,100 Noncontrolling interest in Shipley Company —0— 38,194 Common...

  • Cairns owns 80 percent of the voting stock of Hamilton, Inc. The parent's interest was acquired...

    Cairns owns 80 percent of the voting stock of Hamilton, Inc. The parent's interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Cairns uses the equity method in its internal records to account for its investment in Hamilton. On January 1, 2014, Hamilton sold $1,000,000 in 10-year bonds to the public at 110. The bonds had a cash interest rate of 8...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT