On January 1, 20X3, Plimsol Company acquired 100 percent of Shipping Corporation's voting shares, at underlying book value. Plimsol uses the cost method in accounting for its investment in Shipping. Shipping's reported retained earnings of $75,000 on the date of acquisition. The trial balances for Plimsol Company and Shipping Corporation as of December 31, 20X4, follow: Item Current Assets Depreciable Assets (net) Investment in Shipping Corporation Other Expenses Depreciation Expense Dividends Declared Current Liabilities Long-Term Debt Common Stock Retained Earnings. Sales Dividend Income Plimsol Company Debit Credit $ 160,000 180,000 125,000 85,000 20,000 30,000 Shipping Corporation Debit Credit $ 115,000 135,000 60,000 15,000 15,000 $ 25,000 75,000 100,000 210,000 175,000 15,000 $ 600,000 $ 600,000 $ 340,000 $ 20,000 50,000 50,000 100,000 120,000 $ 340,000 Required: 1. Provide all consolidating entries required to prepare a full set of consolidated statements for 20X4. 2. Prepare a three-part consolidation worksheet in good form as of December 31, 20X4.

On January 1, 20X3, Plimsol Company acquired 100 percent of Shipping Corporation's voting shares, at underlying book value. Plimsol uses the cost method in accounting for its investment in Shipping. Shipping's reported retained earnings of $75,000 on the date of acquisition. The trial balances for Plimsol Company and Shipping Corporation as of December 31, 20X4, follow: Item Current Assets Depreciable Assets (net) Investment in Shipping Corporation Other Expenses Depreciation Expense Dividends Declared Current Liabilities Long-Term Debt Common Stock Retained Earnings. Sales Dividend Income Plimsol Company Debit Credit $ 160,000 180,000 125,000 85,000 20,000 30,000 Shipping Corporation Debit Credit $ 115,000 135,000 60,000 15,000 15,000 $ 25,000 75,000 100,000 210,000 175,000 15,000 $ 600,000 $ 600,000 $ 340,000 $ 20,000 50,000 50,000 100,000 120,000 $ 340,000 Required: 1. Provide all consolidating entries required to prepare a full set of consolidated statements for 20X4. 2. Prepare a three-part consolidation worksheet in good form as of December 31, 20X4.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

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On January 1, 20X3, Plimsol Company acquired 100 percent of Shipping Corporation's voting shares, at underlying book value. Plimsol uses the cost method in accounting for its investment in Shipping. Shipping's
reported retained earnings of $75,000 on the date of acquisition. The trial balances for Plimsol Company and Shipping Corporation as of December 31, 20X4, follow:
24
Item
Current Assets
Depreciable Assets (net)
Investment in Shipping Corporation
Other Expenses
Depreciation Expense
Dividends Declared
Current Liabilities
Long-Term Debt
Common Stock
Retained Earnings
Sales
Dividend Income
Plimsol Company
Debit
Credit
$ 160,000
180,000
125,000
85,000
20,000
30,000
Shipping Corporation
Debit
Credit
$ 115,000
135,000
60,000
15,000
15,000
$ 25,000
75,000
100,000
210,000
175,000
15,000
$ 600,000 $ 600,000 $ 340,000 $ 340,000
$ 20,000
50,000
50,000
Required:
1. Provide all consolidating entries required to prepare a full set of consolidated statements for 20X4.
2. Prepare a three-part consolidation worksheet in good form as of December 31, 20X4.
100,000
120,000

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Step 1: Introduction of Investment in Associates and Joint venture and Subsidiary

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Step 2: Working related Investment in company and NCI

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Step 3: Working related to the Journal Entry

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