Homework Help is Here – Start Your Trial Now!
Business
Accounting
Proud Corporation acquired 80 percent of Spirited Company's voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Spirited at that date. Assume that the accumulated depreciation on depreciable assets was $60,000 on the acquisition date. Proud uses the equity method in accounting for its ownership of Spirited. On December 31, 20X4, the trial balances of the two companies are as follows: Item Current Assets Depreciable Assets Investment in Spirited Company Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Debt Common Stock Retained Earnings Sales Income from Spirited Company Proud Corporation Debit $ 235,000 500,000 152,000 25,000 150,000 50,000 Credit Spirited Company Debit Credit $ 150,000 300,000 15,000 90,000 15,000 $ 200,000 $ 90,000 70,000 50,000 100,000 120,000 200,000 100,000 284,000 70,000 230,000 148,000 28,008 $ 1,112,000 1,112,000 S 570,000 $ 570,000 Required: a. Prepare all consolidation entries required on December 31, 20X4, to prepare consolidated financial statements. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. view transaction list transaction list No A Event Accounts Common stock Retained earnings Income from Spirited Company NCI in Net Income of Spirited Company Dividends declared Investment in Spirited Company NCI in Net Assets of Spirited Company B 2 Accumulated depreciation Depreciable assets Debit Credit 100,000 70,000 28,000 7,000 15,000 152,000 38,000 60,000 60,000

Proud Corporation acquired 80 percent of Spirited Company's voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Spirited at that date. Assume that the accumulated depreciation on depreciable assets was $60,000 on the acquisition date. Proud uses the equity method in accounting for its ownership of Spirited. On December 31, 20X4, the trial balances of the two companies are as follows: Item Current Assets Depreciable Assets Investment in Spirited Company Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Debt Common Stock Retained Earnings Sales Income from Spirited Company Proud Corporation Debit $ 235,000 500,000 152,000 25,000 150,000 50,000 Credit Spirited Company Debit Credit $ 150,000 300,000 15,000 90,000 15,000 $ 200,000 $ 90,000 70,000 50,000 100,000 120,000 200,000 100,000 284,000 70,000 230,000 148,000 28,008 $ 1,112,000 1,112,000 S 570,000 $ 570,000 Required: a. Prepare all consolidation entries required on December 31, 20X4, to prepare consolidated financial statements. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. view transaction list transaction list No A Event Accounts Common stock Retained earnings Income from Spirited Company NCI in Net Income of Spirited Company Dividends declared Investment in Spirited Company NCI in Net Assets of Spirited Company B 2 Accumulated depreciation Depreciable assets Debit Credit 100,000 70,000 28,000 7,000 15,000 152,000 38,000 60,000 60,000

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8MC
See similar textbooks
icon
Related questions
Question
Proud Corporation acquired 80 percent of Spirited Company's voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Spirited at that date. Assume that the accumulated depreciation on depreciable assets was $60,000 on the acquisition date. Proud uses the equity method in accounting for its ownership of Spirited. On December 31, 20X4, the trial balances of the two companies are as follows: Item Current Assets Depreciable Assets Investment in Spirited Company Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Debt Common Stock Retained Earnings Sales Income from Spirited Company Proud Corporation Debit $ 235,000 500,000 152,000 25,000 150,000 50,000 Credit Spirited Company Debit Credit $ 150,000 300,000 15,000 90,000 15,000 $ 200,000 $ 90,000 70,000 50,000 100,000 120,000 200,000 100,000 284,000 70,000 230,000 148,000 28,008 $ 1,112,000 1,112,000 S 570,000 $ 570,000 Required: a. Prepare all consolidation entries required on December 31, 20X4, to prepare consolidated financial statements. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. view transaction list transaction list No A Event Accounts Common stock Retained earnings Income from Spirited Company NCI in Net Income of Spirited Company Dividends declared Investment in Spirited Company NCI in Net Assets of Spirited Company B 2 Accumulated depreciation Depreciable assets Debit Credit 100,000 70,000 28,000 7,000 15,000 152,000 38,000 60,000 60,000
Transcribed Image Text:Proud Corporation acquired 80 percent of Spirited Company's voting stock on January 1, 20X3, at underlying book value. The fair value of the noncontrolling interest was equal to 20 percent of the book value of Spirited at that date. Assume that the accumulated depreciation on depreciable assets was $60,000 on the acquisition date. Proud uses the equity method in accounting for its ownership of Spirited. On December 31, 20X4, the trial balances of the two companies are as follows: Item Current Assets Depreciable Assets Investment in Spirited Company Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Current Liabilities Long-Term Debt Common Stock Retained Earnings Sales Income from Spirited Company Proud Corporation Debit $ 235,000 500,000 152,000 25,000 150,000 50,000 Credit Spirited Company Debit Credit $ 150,000 300,000 15,000 90,000 15,000 $ 200,000 $ 90,000 70,000 50,000 100,000 120,000 200,000 100,000 284,000 70,000 230,000 148,000 28,008 $ 1,112,000 1,112,000 S 570,000 $ 570,000 Required: a. Prepare all consolidation entries required on December 31, 20X4, to prepare consolidated financial statements. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. view transaction list transaction list No A Event Accounts Common stock Retained earnings Income from Spirited Company NCI in Net Income of Spirited Company Dividends declared Investment in Spirited Company NCI in Net Assets of Spirited Company B 2 Accumulated depreciation Depreciable assets Debit Credit 100,000 70,000 28,000 7,000 15,000 152,000 38,000 60,000 60,000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
SWFT Corp Partner Estates Trusts
SWFT Corp Partner Estates Trusts
Accounting
ISBN:
9780357161548
Author:
Raabe
Publisher:
Cengage
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage
SWFT Comprehensive Vol 2020
SWFT Comprehensive Vol 2020
Accounting
ISBN:
9780357391723
Author:
Maloney
Publisher:
Cengage
SEE MORE TEXTBOOKS