Pillow Corporation acquired 80 percent ownership of Sheet Company on January 1, 20X7, for $173,000. At that date, the fair value ofthe noncontrolling interest was $43,250. The trial balances for the two companies on December 31, 20X7, included the followingamounts:ItemCashAccounts ReceivableInventoryLandBuildings and Equipment.Investment in Sheet CompanyCost of Goods SoldDepreciation ExpenseOther ExpensesDividends DeclaredAccumulated DepreciationAccounts PayableMortgages PayableCommon StockRetained EarningsSalesIncome from Sheet CompanyPillow CorporationDebit$ 38,00050,000240,00080,000500,000202,000500,00025,00075,00050,000view darpadort Hot$ 1,760,000Credit$ 155,00070,000200,000300,000290,000700,00045,000$ 1,760,000wandeosoITIOLSheet CompanyRecord the basic consolidation entry.Debit$ 25,00055,000100,00020,000150,000250,00015,00075,00020,000$ 710,000CreditAdditional Information1. On January 1, 20X7, Sheet reported Buildings and Equipment with a book value of $150,000 and a fair value of $191,250.Accumulated depreciation on Buildings and Equipment was $60,000 on the acquisition date.2. Sheet's depreciable assets had an estimated economic life of 11 years on the date of combination. Goodwill of $25,000 wasrecorded at the acquisition.3. Pillow used the equity method in accounting for its investment in Sheet.4. Detailed analysis of receivables and payables showed that Sheet owed Pillow $16,000 on December 31, 20x7.OB Record the amortized excess value reclassification entry.CRecord the excess value (differential) reclassificationentry.D Record the entry to eliminate the intercompany accounts.Record the optional accumulated depreciationconsolidation entry.O$ 75,00035,00050,00050,000100,000400,000$ 710,000pXCDE345equired for a transaction/event, select "No journal entry required" in the first account field.Depreciation expenseCost of goods soldCommon stockRetained earningsIncome from Sheet CompanyNCI in Net Income of Sheet CompanyDividends declaredInvestment in Sheet CompanyNCI in Net assets of Sheet CompanyX Answer is not complete.Buildings and equipmentGoodwillIncome from Sheet CompanyNCI in Net Income of Sheet CompanyAccountsAccounts payableAccounts receivableInvestment in Sheet CompanyNCI in Net assets of Sheet CompanyAccumulated depreciationBuildings and equipment››› ››› ›✓✓✓✓✓✓1*1* 00 00 00 00✓X✓Debit50,000✔100,000✔36,000 X9,000 X3,750✔41,250››25,000✔>16,000 ✓60,000✔Credit20,000✔140,000 X35,000 X3.750 X53,000 X13,250 X16,000✔60,000✔OE..C

Consolidation is an activity in which financial statements of a parent and its subsidiary should be…

Pillow Corporation acquired 80 percent ownership of Sheet Company on January 1, 20X7, for $173,000. At that date, the fair value of the noncontrolling interest was $43,250. The trial balances for the two companies on December 31, 20X7, included the following amounts: Item Cash Accounts Receivable Inventory Land Buildings and Equipment Investment in Sheet Company Cost of Goods Sold Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Mortgages Payable Common Stock Retained Earnings Sales Income from Sheet Company Additional Information Pillow Corporation Debit $ 38,000 50,000 240,000 80,000 500,000 202,000 500,000 25,000 75,000 50,000 $ 1,760,000 Credit $ 155,000 70,000 200,000 300,000 290,000 700,000 45,000 $ 1,760,000 Sheet Company Debit $ 25,000 55,000 100,000 20,000 150,000 250,000 15,000 75,000 20,000 $ 710,000 Credit $ 75,000 35,000 50,000 50,000 100,000 400,000 $ 710,000

Pillow Corporation acquired 80 percent ownership of Sheet Company on January 1, 20X7, for $173,000. At that date, the fair value of the noncontrolling interest was $43,250. The trial balances for the two companies on December 31, 20X7, included the following amounts: Item Cash Accounts Receivable Inventory Land Buildings and Equipment Investment in Sheet Company Cost of Goods Sold Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Mortgages Payable Common Stock Retained Earnings Sales Income from Sheet Company Additional Information Pillow Corporation Debit $ 38,000 50,000 240,000 80,000 500,000 202,000 500,000 25,000 75,000 50,000 $ 1,760,000 Credit $ 155,000 70,000 200,000 300,000 290,000 700,000 45,000 $ 1,760,000 Sheet Company Debit $ 25,000 55,000 100,000 20,000 150,000 250,000 15,000 75,000 20,000 $ 710,000 Credit $ 75,000 35,000 50,000 50,000 100,000 400,000 $ 710,000

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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