Subsidiary Stock Dividend
Pound Manufacturing Corporation prepared the following balance sheet as of January 1, 20X8:
Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation | $ 40,000 90,000 180,000 500,000 (110,000) | Accounts Payable Bonds Payable Common Stock Additional Paid-In Capital Retained Earnings | $ 50,000 200,000 100,000 70,000 280,000 |
Total Assets | $700,000 | Total Liabilities and Equities | $700,000 |
The company is considering a 2-for-1 stock split, a stock dividend of 4,000 shares, or a stock dividend of 1,500 shares on its $10 par value common stock. The current market price per share of Pound stock on January 1, 20X8, is $50. Quick Sales Corporation acquired 68 percent of Pound’s common shares on January 1, 20X4, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 32 percent of the book value of Pound Manufacturing.
Required
Give the investment elimination entry required to prepare a consolidated balance sheet at the close of business on January 1, 20X8, for each of the alternative transactions under consideration by Pound Manufacturing.
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