NEED JOURNAL ENTRIES ONLY FOR BOTH PLEASE Like S, A, I, etc. Prime Company acquired 75% of the common stock of Second Company January 1, year one, for $450,000 The consideration given was proportional to Second's fair value. On that date, Second had the following trial balance: account debit credit Additional paid in capital $100,000 Building (12-year life) $250,000 Common stock 170,000 Current assets 170,000 Equipment (6-yr life) 160,000 Land 110,000 Liabilities (due in 4 years) 300,000 Retained earnings 1/year 1 120,000 Totals $690,000 $690,000 During year one, Second reported net income of $60,000 During year one, Sonny paid dividends of $30,000 During year two, Second reported net income of $80,000 During year two, Sonny paid dividends of $40,000 On January 1, year one, fair values were: Land $146,000 Building $262,000 Equipment $184,000 There was no impairment of any goodwill arising from the acquisition. Please indicate clearly which method you choose for Prime to use to account for its acquisition of Second Company. Problem 4. Use the data for the Prime Company acquisition of some of Second Company to prepare the consolidation worksheet entries for December 31 of year one. Problem 5 Use the data for the Prime Company acquisition of some of Second Company to prepare the consolidation worksheet entries for December 31 of year two.
NEED
Like S, A, I, etc.
Prime Company acquired 75%
of the common stock of Second Company January 1, year one, for $450,000 The consideration given was proportional to Second's fair value. On that date, Second had the following
account debit credit
Additional paid in capital $100,000
Building (12-year life) $250,000
Common stock 170,000
Current assets 170,000
Equipment (6-yr life) 160,000
Land 110,000
Liabilities (due in 4 years) 300,000
Totals $690,000 $690,000
During year one, Second reported net income of $60,000
During year one, Sonny paid dividends of $30,000
During year two, Second reported net income of $80,000
During year two, Sonny paid dividends of $40,000
On January 1, year one, fair values were:
Land $146,000
Building $262,000
Equipment $184,000
There was no impairment of any
Please indicate clearly which method you choose for Prime to use to account for its acquisition of Second Company.
Problem 4. Use the data for the Prime Company acquisition of some of Second Company to prepare the consolidation worksheet entries for December 31 of year one.
Problem 5 Use the data for the Prime Company acquisition of some of Second Company to prepare the consolidation worksheet entries for December 31 of year two.
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