Consolidation Worksheet for Subsidiary
Land Corporation acquired 100 percent of Growth Company’s voting stock on January 1, 20X4, at underlying book value. Land uses the equity-method in accounting for its ownership of Growth. On December 31, 20X4, the trial balances of the two companies are as follows:
Item | Land Corporation | Growth Company | ||
Debit | Credit | Debit | Credit | |
Current Assets | $ 238,000 |
| $150,000 |
|
Depreciable Assets | 500,000 |
| 300,000 |
|
Investment in Growth Company Stock | 190,000 |
|
|
|
Depreciation Expense | 25,000 |
| 15,000 |
|
Other Expenses | 150,000 |
| 90,000 |
|
Dividends Declared | 50,000 |
| 15,000 |
|
Accumulated Depreciation |
| $ 200,000 |
| $ 90,000 |
Current Liabilities |
| 70,000 |
| 50,000 |
Long-Term Debt |
| 100,000 |
| 120,000 |
Common Stock |
| 200,000 |
| 100,000 |
Retained Earnings |
| 318,000 |
| 70,000 |
Sales |
| 230,000 |
| 140,000 |
Income from Subsidiary |
| 35,000 |
|
|
| $1,153,000 | $1,153,000 | $570,000 | $570,000 |
Required
a.Give all eliminating entries required on December 31, 20X4, to prepare consolidated financial statements.
b.Prepare a three-part consolidation worksheet as of December 31, 20X4.
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