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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.

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.

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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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 No A Event 1 Proud Corporation Debit $ 235,000 500,000 152,000 25,000 150,000 50,000 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 $ 200,000 70,000 100,000 200,000 284,000 230,000 28,000 $ 1,112,000 $ 1,112,000 Answer is not complete. Accounts 3333 Credit 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. ✔ ✔ Spirited Company Debit $ 150,000 Credit 300,000 Debit 100,000 70,000 28,000 136,000 X 15,000 90,000 15,000 $570,000 $ 90,000 50,000 120,000 100,000 70,000 140,000 Credit $570,000
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 No A Event 1 Proud Corporation Debit $ 235,000 500,000 152,000 25,000 150,000 50,000 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 $ 200,000 70,000 100,000 200,000 284,000 230,000 28,000 $ 1,112,000 $ 1,112,000 Answer is not complete. Accounts 3333 Credit 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. ✔ ✔ Spirited Company Debit $ 150,000 Credit 300,000 Debit 100,000 70,000 28,000 136,000 X 15,000 90,000 15,000 $570,000 $ 90,000 50,000 120,000 100,000 70,000 140,000 Credit $570,000
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