5 No Transaction 1 *G Retained earnings Cost of goods sold Accounts Debit Credit 4,500 1 2 *TA Equipment points Investment in Sledge Accumulated depreciation-Equipment eBook Print References 3 S Common stock Retained earnings Investment in Sledge Noncontrolling interest in Sledge 4 A Contracts Buildings Investment in Sledge Noncontrolling interest in Sledge 5 | Equity in income of Sledge Investment in Sledge 14,000 320,000 4,500
Can someone assist in explaing on to get results for entry *TA, S, A, I. On January 1, 2024, Sledge had common stock of $320,000 and retained earnings of $460,000. During that year, Sledge reported sales of $330,000, cost of goods sold of $170,000, and operating expenses of $60,000.
On January 1, 2022, Percy, Incorporated, acquired 80 percent of Sledge's outstanding voting stock. At that date, $80,000 of the acquisition-date fair value was assigned to unrecorded contracts (with a 20-year life) and $40,000 to an undervalued building (with a 10-year remaining life).
In 2023, Sledge sold inventory costing $17,500 to Percy for $35,000. Of this merchandise, Percy continued to hold $9,000 at year-end. During 2024, Sledge transferred inventory costing $20,000 to Percy for $40,000. Percy still held half of these items at year-end.
On January 1, 2023, Percy sold equipment to Sledge for $22,000. This asset originally cost $36,000 but had a January 1, 2023, book value of $13,000. At the time of transfer, the equipment's remaining life was estimated to be five years.
Percy has properly applied the equity method to the investment in Sledge.
Required:
- Prepare worksheet entries to consolidate these two companies as of December 31, 2024.
- Compute the net income attributable to the noncontrolling interest for 2024.
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