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Prepare the appropriate 2021 consolidation entries for these two companies. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Prepare the appropriate 2021 consolidation entries for these two companies. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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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On January 1, 2019, Aronsen Company acquired 90 percent of Sledel Company's outstanding shares. Sledel had a net book value on that date of $504,300: common stock ($10 par value) of $207,500 and retained earnings of $296,800. Aronsen paid $600,300 for this Investment. The acquisition-date fair value of the 10 percent noncontrolling Interest was $66,700. The excess fair value over book value associated with the acquisition was used to increase land by $82,220 and to recognize copyrights (16-year remaining life) at $80,480. Subsequent to the acquisition, Aronsen applied the Initial value method to its Investment account In the 2019-2020 period, the subsidiary's retained earnings Increased by $100,600. During 2021, Siedel earned Income of $81,500 while declaring $20,300 in dividends. Also, at the beginning of 2021, Siedel Issued 4,150 new shares of common stock for $38 per share to finance the expansion of its corporate facilities. Aronsen purchased none of these additional shares and therefore recorded no entry. Prepare the appropriate 2021 consolidation entries for these two companies. (If no entry is required for a transaction/event, select "No Journal entry required" In the first account field.) visw transaction ust 1 Prepare entry *C to convert to the equity method. 2 3 Prepare Entry C1 to record the adjustment for the subsidiary stock transaction. Prepare Entry S to eliminate the subsidiary accounts. 4 Prepare Entry A to record the allocation for fair value. 5 Prepare Entry I to account for the income accrual. G Prepare Entry E to recognize the current year amortization. Note: = journal entry has been entered ☑ Credit >
Transcribed Image Text:On January 1, 2019, Aronsen Company acquired 90 percent of Sledel Company's outstanding shares. Sledel had a net book value on that date of $504,300: common stock ($10 par value) of $207,500 and retained earnings of $296,800. Aronsen paid $600,300 for this Investment. The acquisition-date fair value of the 10 percent noncontrolling Interest was $66,700. The excess fair value over book value associated with the acquisition was used to increase land by $82,220 and to recognize copyrights (16-year remaining life) at $80,480. Subsequent to the acquisition, Aronsen applied the Initial value method to its Investment account In the 2019-2020 period, the subsidiary's retained earnings Increased by $100,600. During 2021, Siedel earned Income of $81,500 while declaring $20,300 in dividends. Also, at the beginning of 2021, Siedel Issued 4,150 new shares of common stock for $38 per share to finance the expansion of its corporate facilities. Aronsen purchased none of these additional shares and therefore recorded no entry. Prepare the appropriate 2021 consolidation entries for these two companies. (If no entry is required for a transaction/event, select "No Journal entry required" In the first account field.) visw transaction ust 1 Prepare entry *C to convert to the equity method. 2 3 Prepare Entry C1 to record the adjustment for the subsidiary stock transaction. Prepare Entry S to eliminate the subsidiary accounts. 4 Prepare Entry A to record the allocation for fair value. 5 Prepare Entry I to account for the income accrual. G Prepare Entry E to recognize the current year amortization. Note: = journal entry has been entered ☑ Credit >
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