Consolidation Worksheet
Crow Corporation purchased 70 percent of West Company’s voting common stock on January 1, 20X5, for $291,200. On that date, the noncontrolling interest had a fair value of $124,800 and the book value of West’s net assets was $380,000. The book values and fair values of West’s assets and liabilities were equal, except for land that had a fair value $14,000 greater than book value. The amount attributed to goodwill as a result of the acquisition is not amortized and has not been impaired.
CROW CORPORATION AND WEST COMPANY Trial Balance Data December 31, 20×9 | ||||
Item | Crow Corporation | West Company | ||
Debit | Credit | Debit | Credit | |
Cash and Receivables | $ 81,300 |
| $ 85,000 |
|
Inventory | 200,000 |
| 110,000 |
|
Land, Buildings, and Equipment (net) | 270,000 |
| 250,000 |
|
Investment in West Company Stock | 290,200 |
|
|
|
Cost of Goods and Services | 200,000 |
| 150,000 |
|
Depreciation Expense | 40,000 |
| 30,000 |
|
Dividends Declared | 35,000 |
| 5,000 |
|
Sales and Service Revenue |
| $ 300,000 |
| $200,000 |
Income from Subsidiary |
| 24,500 |
|
|
Accounts Payable |
| 60,000 |
| 30,000 |
Common Stock |
| 200,000 |
| 150,000 |
Retained Earnings |
| 532,000 |
| 250,000 |
Total | 1,116,500 | 1,116,500 | $630,000 | $630,000 |
On January 1, 20X9, Crow’s inventory contained unrealized intercompany profits recorded by West in the amount of $30,000. West’s inventory on that date contained $15,000 of unrealized intercompany profits recorded on Crow’s books. Both companies sold their ending 20X8 inventories to unrelated companies in 20X9.
During 20X9, West sold inventory costing $37,000 to Crow for $62,000. Crow held all inventory purchased from West during 20X9 on December 31, 20X9. Also during 20X9, Crow sold goods costing $54,000 to West for $90,000. West continues to hold $20,000 of its purchase from Crow on December 31, 20X9. Assume Crow uses the fully adjusted equity method.
Required
a. Prepare all eliminating entries needed to complete a consolidation worksheet as of December 31, 20X9.
b. Prepare a consolidation worksheet as of December 31, 20X9.
c. Prepare a reconciliation between the balance in retained earnings reported by Crow on December 31, 20X9, and consolidated retained earnings.
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.