Basic Consolidation Worksheet for Second Year
Blake Corporation acquired 100 percent of Shaw Corporation’s voting shares on January 1, 20X3, at underlying book value. At that date, the book values and fair values of Shaw’s assets and liabilities were equal. Blake uses the equity-method in accounting for its investment in Shaw. Adjusted trial balances for Blake and Shaw on December 31, 20X4, are as follows:
Item | Blake Corporation | Shaw Corporation | ||
Debit | Credit | Debit | Credit | |
Current Assets | $210,000 |
| $150,000 |
|
Depreciable Assets (net) | 300,000 |
| 210,000 |
|
Investment in Shaw Corporation Stock | 190,000 |
|
|
|
Depreciation Expense | 25,000 |
| 15,000 |
|
Other Expenses | 150,000 |
| 90,000 |
|
Dividends Declared | 50,000 |
| 15,000 |
|
Current Liabilities |
| $ 70,000 |
| $ 50,000 |
Long-Term Debt |
| 100,000 |
| 120,000 |
Common Stock |
| 200,000 |
| 100,000 |
Retained Earnings |
| 290,000 |
| 70,000 |
Sales |
| 230,000 |
| 140,000 |
Income from Subsidiary |
| 35,000 |
|
|
| $925,000 | $925,000 | $480,000 | $480,000 |
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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