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Required: 1. Provide all eliminating entries needed for consolidation as of December 31, 2016. 2. Prepare a consolidation workpaper for Irbid and Jerash co. as of December 31, 2016

Required: 1. Provide all eliminating entries needed for consolidation as of December 31, 2016. 2. Prepare a consolidation workpaper for Irbid and Jerash co. as of December 31, 2016

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, 2016, Irbid Corporation acquired 90% of Jerash Company's voting stock, at underlying book value. At that date, the fair value of Jerash's net asset was equal to book value. Irbid uses the equity method in accounting for its ownership of Jerash. On December 31, 2016, the trial balances of the two companies are as follows: Irbid Corp. Debit $ 225,500 300,000 144,000 30,000 180,000 40,000 Jerash Comp. Debit $145,000 225,000 Credit Credit Current assets Fixed assets Investment in Jerash co. Depreciation expense Other expense Dividend 25,000 85,000 10,000 Accumulated depreciation Current liabilities Long-term debt Capital stock Retained earnings sales Income from subsidiary Total $150,000 45,000 75,000 100,000 282,500 253,500 13,500 $919,500 $100,000 20,000 90,000 75,000 80,000 125,000 $919,500 | $490,000 $490,000 Required: 1. Provide all eliminating entries needed for consolidation as of December 31, 2016. 2. Prepare a consolidation workpaper for Irbid and Jerash co. as of December 31, 2016
Transcribed Image Text:On January 1, 2016, Irbid Corporation acquired 90% of Jerash Company's voting stock, at underlying book value. At that date, the fair value of Jerash's net asset was equal to book value. Irbid uses the equity method in accounting for its ownership of Jerash. On December 31, 2016, the trial balances of the two companies are as follows: Irbid Corp. Debit $ 225,500 300,000 144,000 30,000 180,000 40,000 Jerash Comp. Debit $145,000 225,000 Credit Credit Current assets Fixed assets Investment in Jerash co. Depreciation expense Other expense Dividend 25,000 85,000 10,000 Accumulated depreciation Current liabilities Long-term debt Capital stock Retained earnings sales Income from subsidiary Total $150,000 45,000 75,000 100,000 282,500 253,500 13,500 $919,500 $100,000 20,000 90,000 75,000 80,000 125,000 $919,500 | $490,000 $490,000 Required: 1. Provide all eliminating entries needed for consolidation as of December 31, 2016. 2. Prepare a consolidation workpaper for Irbid and Jerash co. as of December 31, 2016
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