Worksheet for Majority-Owned Subsidiary
Glitter Enterprises acquired 60 percent of Lowtide Builders’ stock on December 31, 20X4. Glitter acquired its shares for $90,000, the book value of the shares acquired. At that date, the fair value of the noncontrolling interest was equal to 40 percent of the book value of Lowtide. Balance sheet data for Glitter and Lowtide on January 1, 20X5, are as follows:
| Glitter Enterprises | Lowtide Builders |
Cash and Receivables | $ 80,000 | $ 30,000 |
Inventory | 150,000 | 350,000 |
Buildings and Equipment (net) | 430,000 | 80,000 |
Investment in Lowtide Stock | 90,000 |
|
Total Assets | $750,000 | $460,000 |
Current Liabilities | $100,000 | $110,000 |
Long-Term Debt | 400,000 | 200,000 |
Common Stock | 200,000 | 140,000 |
Retained Earnings | 50,000 | 10,000 |
Total Liabilities and Stockholders’ Equity | $750,000 | $460,000 |
Required
a. Give all eliminating entries needed to prepare a consolidated balance sheet on January 1, 20X5.
b. Complete a consolidated balance sheet worksheet.
c. Prepare a consolidated balance sheet in good form.
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