Consolidated Workpaper, Partially Owned Subsidiary, Cost Method

FratBro23
Category:
Business & Finance
Price: $20 USD

Question description


Place Company purchased 92% of the common stock of Shaw, Inc. on January 1, 2010, for

$400,000. Trial balances at the end of 2010 for the companies were:

Place Shaw

Cash $ 80,350 $ 87,000

Accounts and Notes Receivable 200,000 210,000

Inventory, 1/1 70,000 50,000

Investment in Shaw, Inc. 400,000 —0—

Plant Assets 300,000 200,000

Dividends Declared 35,000 22,000

Purchases 240,000 150,000

Selling Expenses 28,000 20,000

Other Expenses 15,000 13,000

$1,368,350 $752,000

Accounts and Notes Payable $ 99,110 $ 38,000

Other Liabilities 45,000 15,000

Common Stock, $10 par 150,000 100,000

Other Contributed Captital 279,000 149,000

Retained Earnings, 1/1 225,000 170,000

Sales 550,000 280,000

Dividend Income 20,240 —0—

$1,368,350 $752,000

Inventory balances on December 31, 2010, were $25,000 for Place and $15,000 for Shaw, Inc.

Shaw’s accounts and notes payable contain a $15,000 note payable to Place.

Required:

Prepare a workpaper for the preparation of consolidated financial statements on December

31, 2010. The difference between book value of equity acquired and the value implied by the

purchase price relates to subsidiary land, which is included in plant assets.

Tutor Answer

(Top Tutor) Daniel C.
(997)
School: Purdue University
PREMIUM TUTOR
Studypool has helped 1,244,100 students
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1828 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors