Baker Company Cain Company Jan. 1, 2019 Jan. 1, 2015 Jan. 1, 2019 Common stock....... Paid-in capital in excess of par Retained earnings ... $ 400,000 $100,000 150,000 300,000 $100,000 1,100,000 2,000,000 150,000 450,000
Baker Company acquires an 80%interest in the common stock of Cain Company for $440,000 on January 1, 2015. The price is equal to the book value of the interest acquired. Baker Company maintains its investment in Cain Company under the cost method.
Able Company acquires a 60% interest in the common stock of Baker Company on January 1, 2019, for $2,700,000. Any excess of cost is attributable to Cain Company equipment, which is understated by $80,000, and a Baker Company building, which is understated by $200,000. Any remaining excess is considered
1. Prepare a determination and distribution of excess schedule for Able Company’s investment in Baker Company.
2. On January 1, 2020, Cain Company sells a machine with a net book value of $35,000 to Able Company for $60,000. The machine has a 5-year life. Prepare the eliminations and adjustments needed on the December 31, 2021,
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
