esPenn Corporation purchased 80 percent ownership of State Company on January 1, 20X2. at underlying book value. At that date, thefair value of the noncontrolling Interest was equal to 20 percent of the book value of State. On January 1, 20X4, Penn sold 2,000shares of State's stock for $65,000 to Nonaffiliated Company and recorded a $10,000 Increase in additional pald-in capital. Trialbalances for the companies on December 31, 20X4, contain the following data:CashAccounts ReceivableInventoryBuildings and EquipmentInvestment in State CompanyCost of Goods SoldDepreciation ExpenseOther ExpensesDividends DeclaredAccumulated DepreciationAccounts PayableBonds PayableConnon Stock ($10 par)Additional Paid-In CapitalRetained EarningsSalesIncome from StateTotalPenn CorporationDebit$ 36,00079,000122,000660,000187,200205,00020,00022,00022,000CreditState CompanyCreditDebit$ 41,00059,000102,000270,00095,00015,00026,00017,000$167,000163,000165,000200,00067,000295,000271,00025,200$1,153,200 $1,353,200 $625,000 $ 625.000Required.a. Prepare the consolidation entries needed to complete a worksheet for 20X4b. Prepare a consolidation worksheet for 20X4$ 92,00046,000Complete this question by entering your answers in the tabs below.22,000100,000State's net income was earned evenly throughout the year. Both companies declared and paid their dividends on December 31, 20X4Penn uses the equity method in accounting for its Investment in State27,000160,000178,000

Penn Corporation purchased 80 percent ownership of State Company on January 1, 20X2, at underlying book value. At that date, the fair value of the noncontrolling Interest was equal to 20 percent of the book value of State. On January 1, 20X4, Penn sold 2,000 shares of State's stock for $65,000 to Nonaffiliated Company and recorded a $10,000 Increase in additional pald-in capital. Trial balances for the companies on December 31, 20X4, contain the following data:

Penn Corporation purchased 80 percent ownership of State Company on January 1, 20X2, at underlying book value. At that date, the fair value of the noncontrolling Interest was equal to 20 percent of the book value of State. On January 1, 20X4, Penn sold 2,000 shares of State's stock for $65,000 to Nonaffiliated Company and recorded a $10,000 Increase in additional pald-in capital. Trial balances for the companies on December 31, 20X4, contain the following data:

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter8: Consolidated Tax Returns

Section: Chapter Questions

Problem 36P

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