Consolidation Worksheet after Remeasurement
Refer to the information given in Problems P12-23 and P12-27 for Alamo and its subsidiary, Western Ranching. Assume that the U.S. dollar is the functional currency and that Alamo uses the basic
equity method for accounting for its investment in Western Ranching. A December 31, 20X3, trial t balance for Alamo follows. Use this remeasured trial balance for completing this problem.
Item | Debit | Credit |
Cash | $ 38,000 |
|
Accounts Receivable (net) | 140,000 |
|
Receivable from Western Ranching | 6,480 |
|
Inventory | 128,000 |
|
Plant and Equipment | 500,000 |
|
Investment in Western Ranching | 178,544 |
|
Cost of Goods Sold | 600,000 |
|
Depreciation Expense | 28,000 |
|
Operating Expenses | 204,000 |
|
Interest Expense | 2,000 |
|
Dividends Declared | 50,000 |
|
Accumulated Depreciation |
| $ 90,000 |
Accounts Payable |
| 60,000 |
Interest Payable |
| 2,000 |
Common Stock |
| 500,000 |
Retained Earnings, January 1, 20×3 |
| 179,656 |
Sales |
| 1,000,000 |
Income from Subsidiary |
| 43,368 |
Total | $1,875,024 | $1,875,024 |
Required
a.Prepare a set of eliminating entries, in general journal form, for the entries required to prepare a three-part consolidation worksheet as of December 31, 20X3.
b.Prepare a three-part consolidation worksheet as of December 31, 20X3.
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