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Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fair value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common stock for $102,000. Summarized balance sheets for Split on the dates indicated are as follows: Assets Cash Accounts Receivable Inventory Buildings & Equipment (net) Total Assets Liabilities & Equities Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities & Equities 20x7 December 31 20X8 20X9 $ 47,000 55,000 $ 77,000 95,000 $ 97,000 125,000 73,000 103,000 163,000 365,000 345,000 325,000 $540,000 $620,000 $710,000 $ 75,000 $125,000 $165,000 105,000 105,000 105,000 155,000 155,000 155,000 205,000 $540,000 235,000 $620,000 $710,000 285,000 Split paid dividends of $23,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and amortizes all differentials over 10 years against the related investment income. All differentials are assigned to patents in the consolidated financial statements. Required: a. Compute the balance in Peel's Investment in Split Products Company Stock account on December 31, 20X8. Answer is complete and correct. Balance in investment account $ 234,000 b. Compute the balance in Peel's Investment in Split Products Company Stock account on December 31, 20X9. × Answer is not complete. Balance in investment account c. Prepare the consolidation entries needed as of December 31, 20X9, to complete a three-part consolidation worksheet. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event A 1 Common stock × Answer is not complete. Accounts Additional paid-in capital Retained earnings Investment in Split Products Co. Debit Credit

Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fair value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common stock for $102,000. Summarized balance sheets for Split on the dates indicated are as follows: Assets Cash Accounts Receivable Inventory Buildings & Equipment (net) Total Assets Liabilities & Equities Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities & Equities 20x7 December 31 20X8 20X9 $ 47,000 55,000 $ 77,000 95,000 $ 97,000 125,000 73,000 103,000 163,000 365,000 345,000 325,000 $540,000 $620,000 $710,000 $ 75,000 $125,000 $165,000 105,000 105,000 105,000 155,000 155,000 155,000 205,000 $540,000 235,000 $620,000 $710,000 285,000 Split paid dividends of $23,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and amortizes all differentials over 10 years against the related investment income. All differentials are assigned to patents in the consolidated financial statements. Required: a. Compute the balance in Peel's Investment in Split Products Company Stock account on December 31, 20X8. Answer is complete and correct. Balance in investment account $ 234,000 b. Compute the balance in Peel's Investment in Split Products Company Stock account on December 31, 20X9. × Answer is not complete. Balance in investment account c. Prepare the consolidation entries needed as of December 31, 20X9, to complete a three-part consolidation worksheet. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event A 1 Common stock × Answer is not complete. Accounts Additional paid-in capital Retained earnings Investment in Split Products Co. Debit Credit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fair value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common stock for $102,000. Summarized balance sheets for Split on the dates indicated are as follows: Assets Cash Accounts Receivable Inventory Buildings & Equipment (net) Total Assets Liabilities & Equities Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities & Equities 20x7 December 31 20X8 20X9 $ 47,000 55,000 $ 77,000 95,000 $ 97,000 125,000 73,000 103,000 163,000 365,000 345,000 325,000 $540,000 $620,000 $710,000 $ 75,000 $125,000 $165,000 105,000 105,000 105,000 155,000 155,000 155,000 205,000 $540,000 235,000 $620,000 $710,000 285,000 Split paid dividends of $23,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and amortizes all differentials over 10 years against the related investment income. All differentials are assigned to patents in the consolidated financial statements. Required: a. Compute the balance in Peel's Investment in Split Products Company Stock account on December 31, 20X8. Answer is complete and correct. Balance in investment account $ 234,000
Transcribed Image Text:Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fair value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common stock for $102,000. Summarized balance sheets for Split on the dates indicated are as follows: Assets Cash Accounts Receivable Inventory Buildings & Equipment (net) Total Assets Liabilities & Equities Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities & Equities 20x7 December 31 20X8 20X9 $ 47,000 55,000 $ 77,000 95,000 $ 97,000 125,000 73,000 103,000 163,000 365,000 345,000 325,000 $540,000 $620,000 $710,000 $ 75,000 $125,000 $165,000 105,000 105,000 105,000 155,000 155,000 155,000 205,000 $540,000 235,000 $620,000 $710,000 285,000 Split paid dividends of $23,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and amortizes all differentials over 10 years against the related investment income. All differentials are assigned to patents in the consolidated financial statements. Required: a. Compute the balance in Peel's Investment in Split Products Company Stock account on December 31, 20X8. Answer is complete and correct. Balance in investment account $ 234,000
b. Compute the balance in Peel's Investment in Split Products Company Stock account on December 31, 20X9. × Answer is not complete. Balance in investment account c. Prepare the consolidation entries needed as of December 31, 20X9, to complete a three-part consolidation worksheet. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event A 1 Common stock × Answer is not complete. Accounts Additional paid-in capital Retained earnings Investment in Split Products Co. Debit Credit
Transcribed Image Text:b. Compute the balance in Peel's Investment in Split Products Company Stock account on December 31, 20X9. × Answer is not complete. Balance in investment account c. Prepare the consolidation entries needed as of December 31, 20X9, to complete a three-part consolidation worksheet. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event A 1 Common stock × Answer is not complete. Accounts Additional paid-in capital Retained earnings Investment in Split Products Co. Debit Credit
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