Pirate Corporation acquired 60 percent ownership of Ship Company on January 1, 20X8, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 40 percent of the book value of Ship Company. Accumulated depreciation on Buildings and Equipment was $75,000 on the acquisition date. Trial balance data at December 31, 20X8, for Pirate and Ship are as follows: Item Cash Accounts Receivable Inventory Buildings and Equipment Investment in Row Company Investment in Ship Company Cost of Goods Sold Depreciation Expense Interest Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings (OCI)-Unrealized Gain on Investments Other Comprehensive Income from Ship Company Unrealized Gain on Investments (OCI) Sales Income from Ship Company Pirate Corporation Debit Ship Company Credit Debit Credit $ 27,000 $8,000 65,000 22,000 40,000 30,000 500,000 235,000 40,000 108,000 150,000 110,000 30,000 10,000 8,000 24,000 3,000 15,000 $ 140,000 63,000 100,000 200,000 208,000 $ 85,000 20,000 50,000 100,000 60,000 6,000 10,000 $ 952,000 220,000 15,000 $ 952,000 148,000 $ 473,000 $ 473,000 Additional Information Ship purchased stock of Row Company on January 1, 20X8, for $30,000 and classified the investment as available-for-sale securities. The value of Row's securities increased to $40,000 at December 31, 20X8. Required: a. Record all consolidation entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Pirate Corporation acquired 60 percent ownership of Ship Company on January 1, 20X8, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 40 percent of the book value of Ship Company. Accumulated depreciation on Buildings and Equipment was $75,000 on the acquisition date. Trial balance data at December 31, 20X8, for Pirate and Ship are as follows: Item Cash Accounts Receivable Inventory Buildings and Equipment Investment in Row Company Investment in Ship Company Cost of Goods Sold Depreciation Expense Interest Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings (OCI)-Unrealized Gain on Investments Other Comprehensive Income from Ship Company Unrealized Gain on Investments (OCI) Sales Income from Ship Company Pirate Corporation Debit Ship Company Credit Debit Credit $ 27,000 $8,000 65,000 22,000 40,000 30,000 500,000 235,000 40,000 108,000 150,000 110,000 30,000 10,000 8,000 24,000 3,000 15,000 $ 140,000 63,000 100,000 200,000 208,000 $ 85,000 20,000 50,000 100,000 60,000 6,000 10,000 $ 952,000 220,000 15,000 $ 952,000 148,000 $ 473,000 $ 473,000 Additional Information Ship purchased stock of Row Company on January 1, 20X8, for $30,000 and classified the investment as available-for-sale securities. The value of Row's securities increased to $40,000 at December 31, 20X8. Required: a. Record all consolidation entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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Transcribed Image Text:Pirate Corporation acquired 60 percent ownership of Ship Company on January 1, 20X8, at underlying book value. At that date, the fair
value of the noncontrolling interest was equal to 40 percent of the book value of Ship Company. Accumulated depreciation on
Buildings and Equipment was $75,000 on the acquisition date. Trial balance data at December 31, 20X8, for Pirate and Ship are as
follows:
Item
Cash
Accounts Receivable
Inventory
Buildings and Equipment
Investment in Row Company
Investment in Ship Company
Cost of Goods Sold
Depreciation Expense
Interest Expense
Dividends Declared
Accumulated Depreciation
Accounts Payable
Bonds Payable
Common Stock
Retained Earnings
(OCI)-Unrealized Gain on Investments
Other Comprehensive Income from Ship Company
Unrealized Gain on Investments (OCI)
Sales
Income from Ship Company
Pirate Corporation
Ship Company
Debit
Credit
Debit
Credit
$ 27,000
$8,000
65,000
22,000
40,000
30,000
500,000
235,000
40,000
108,000
150,000
110,000
30,000
8,000
24,000
10,000
3,000
15,000
$ 140,000
63,000
$ 85,000
20,000
100,000
50,000
200,000
100,000
208,000
60,000
6,000
10,000
220,000
15,000
148,000
$ 952,000
$ 952,000
$ 473,000
$ 473,000
Additional Information
Ship purchased stock of Row Company on January 1, 20X8, for $30,000 and classified the investment as available-for-sale securities.
The value of Row's securities increased to $40,000 at December 31, 20X8.
Required:
a. Record all consolidation entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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