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Public Corporation acquired 90 percent of Station Company's voting common stock on January 1, 20X1, for $513,900. At the time of the combination, Station reported common stock outstanding of $128,000 and retained earnings of $383,000, and the fair value of the noncontrolling interest was $57,100. The book value of Station's net assets approximated market value except for patents that had a market value of $60,000 more than their book value. The patents had a remaining economic life of ten years at the date of the business combination. Station reported net income of $80,000 and paid dividends of $24,000 during 20X1. Required: a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method in accounting for its investment? Balance in investment account b. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Required: a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method in accounting for its investment? Answer is complete and correct. Balance in investment account $ 558,900 b. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event A 1 Common stock Answer is not complete. Accounts Retained earnings Income from Station Company NCI in NI of Station Company Dividends declared Investment in Station Company NCI in NA of Station Company Debit 128,000 Credit 383,000✓ 72,000 24,000 558,900 57,100 B 2 Amortization Expense 6,000 Income from Station Company 5,400 NCI in NI of Station Company 600 C 3 Patents 54,000 Investment in Station Company 48,600 NCI in NA of Station Company 5,400

Public Corporation acquired 90 percent of Station Company's voting common stock on January 1, 20X1, for $513,900. At the time of the combination, Station reported common stock outstanding of $128,000 and retained earnings of $383,000, and the fair value of the noncontrolling interest was $57,100. The book value of Station's net assets approximated market value except for patents that had a market value of $60,000 more than their book value. The patents had a remaining economic life of ten years at the date of the business combination. Station reported net income of $80,000 and paid dividends of $24,000 during 20X1. Required: a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method in accounting for its investment? Balance in investment account b. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Required: a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method in accounting for its investment? Answer is complete and correct. Balance in investment account $ 558,900 b. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event A 1 Common stock Answer is not complete. Accounts Retained earnings Income from Station Company NCI in NI of Station Company Dividends declared Investment in Station Company NCI in NA of Station Company Debit 128,000 Credit 383,000✓ 72,000 24,000 558,900 57,100 B 2 Amortization Expense 6,000 Income from Station Company 5,400 NCI in NI of Station Company 600 C 3 Patents 54,000 Investment in Station Company 48,600 NCI in NA of Station Company 5,400

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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Public Corporation acquired 90 percent of Station Company's voting common stock on January 1, 20X1, for $513,900. At the time of the combination, Station reported common stock outstanding of $128,000 and retained earnings of $383,000, and the fair value of the noncontrolling interest was $57,100. The book value of Station's net assets approximated market value except for patents that had a market value of $60,000 more than their book value. The patents had a remaining economic life of ten years at the date of the business combination. Station reported net income of $80,000 and paid dividends of $24,000 during 20X1. Required: a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method in accounting for its investment? Balance in investment account b. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Required: a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method in accounting for its investment? Answer is complete and correct. Balance in investment account $ 558,900 b. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event A 1 Common stock Answer is not complete. Accounts Retained earnings Income from Station Company NCI in NI of Station Company Dividends declared Investment in Station Company NCI in NA of Station Company Debit 128,000 Credit 383,000✓ 72,000 24,000 558,900 57,100 B 2 Amortization Expense 6,000 Income from Station Company 5,400 NCI in NI of Station Company 600 C 3 Patents 54,000 Investment in Station Company 48,600 NCI in NA of Station Company 5,400
Transcribed Image Text:Public Corporation acquired 90 percent of Station Company's voting common stock on January 1, 20X1, for $513,900. At the time of the combination, Station reported common stock outstanding of $128,000 and retained earnings of $383,000, and the fair value of the noncontrolling interest was $57,100. The book value of Station's net assets approximated market value except for patents that had a market value of $60,000 more than their book value. The patents had a remaining economic life of ten years at the date of the business combination. Station reported net income of $80,000 and paid dividends of $24,000 during 20X1. Required: a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method in accounting for its investment? Balance in investment account b. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Required: a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method in accounting for its investment? Answer is complete and correct. Balance in investment account $ 558,900 b. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event A 1 Common stock Answer is not complete. Accounts Retained earnings Income from Station Company NCI in NI of Station Company Dividends declared Investment in Station Company NCI in NA of Station Company Debit 128,000 Credit 383,000✓ 72,000 24,000 558,900 57,100 B 2 Amortization Expense 6,000 Income from Station Company 5,400 NCI in NI of Station Company 600 C 3 Patents 54,000 Investment in Station Company 48,600 NCI in NA of Station Company 5,400
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