Sale of Shares by Subsidiary to Nonaffiliate
Browne Corporation purchased 11,000 shares of Schroeder Corporation on January 1, 20X3, at book value. At that date, the fair value of the noncontrolling interest was equal to 26.7 percent of the book value of Schroeder Corporation. On December 31, 20X8, Schroeder reported these balance sheet amounts:
Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation | $ 80,000 120,000 200,000 600,000 (250,000) | Accounts Payable Bonds Payable Common Stock Additional Paid-In Capital Retained Earnings | $ 50,000 100,000 150,000 50,000 400,000 |
Total Assets | $750,000 | Total Liabilities and Equities | $750,000 |
On January 1, 20X9, Schroeder issued an additional 5,000 shares of its $10 par value common stock to Nonaffiliated Company for $80 per share.
Required
a. Compute the change in book value of the shares held by Browne as a result of Schroeder’s issuance of additional shares.
b. Give the entry to be recorded on Browne’s books to recognize the change in book value of the shares it holds, assuming the change in book value is to be treated as an adjustment to additional paid-in capital.
c. Record the eliminating entry needed to prepare a consolidated balance sheet immediately after Schroeder’s issuance of additional shares.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.