On January 1, 2015, Artic Company acquires an 80% interest in Calco Company for $400,000. On the acquisition date, Calco Company has the following stockholders’ equity:Common stock ($10 par). . . . . . . . . . . . . . . . . . $200,000Paid-in capital in excess of par . . . . . . . . . . . . . 100,000Retained earnings . . . . . . . . . . . . . . . . . . . . . . . 150,000Total stockholders’ equity. . . . . . . . . . . . . . . . $450,000Assets and liabilities have fair values equal to book values. Goodwill totals $50,000.Calco Company has net income of $60,000 for 2015. No dividends are paid or declared during 2015.On January 1, 2016, Calco Company sells 10,000 shares of common stock at $60 per share in a public offering.Assuming the parent uses the simple equity method, prepare all parent company entries required for the issuance of the shares.Assume the following alternative situations:1. Artic Company purchases 8,000 shares.2. Artic Company purchases 9,000 shares.3. Artic Company purchases 5,000 shares.
On January 1, 2015, Artic Company acquires an 80% interest in Calco Company for $400,000. On the acquisition date, Calco Company has the following
Common stock ($10 par). . . . . . . . . . . . . . . . . . $200,000
Paid-in capital in excess of par . . . . . . . . . . . . . 100,000
Total stockholders’ equity. . . . . . . . . . . . . . . . $450,000
Assets and liabilities have fair values equal to book values.
Calco Company has net income of $60,000 for 2015. No dividends are paid or declared during 2015.
On January 1, 2016, Calco Company sells 10,000 shares of common stock at $60 per share in a public offering.
Assuming the parent uses the simple equity method, prepare all parent company entries required for the issuance of the shares.
Assume the following alternative situations:
1. Artic Company purchases 8,000 shares.
2. Artic Company purchases 9,000 shares.
3. Artic Company purchases 5,000 shares.
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