9 Trim Corporation acquired 100 percent of Round Corporation's voting common stock on January 1, 20X2, for $408,000.At that date, the book values and fair values of Round's assets and liabilities were equal. Round reported the followingsummarized balance sheet data:AssetsTotal$ 700,000Accounts PayableBonds PayableCommon StockRetained Earnings$ 700,000Total$ 95,000197,000124,000284,000$ 700,000Round reported net income of $74,000 for 20X2 and paid dividends of $22,000.Required:a. Give the journal entries recorded by Trim Corporation during 20X2 on its books if Trim accounts for its investment inRound using the equity method.b. Give the consolidation entries needed at December 31, 20X2, to prepare consolidated financial statements.

Step 1Accounts for its investment in Round using the equity method by recognizing its share of…

Answered: Trim Corporation acquired 100 percent…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

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Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 1BCRQ

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Trim Corporation acquired 100 percent of Round Corporation's voting common stock on January 1, 20X2, for $414,000. At that date, the book values and fair values of Round's assets and liabilities were equal. Round reported the following summarized balance sheet data: Assets $ 713,000 Accounts Payable Bonds Payable $ 104,000 195,000 Common Stock 128,000 Total $ 713,000 Retained Earnings Total 286,000 $ 713,000 Round reported net income of $79,000 for 20X2 and paid dividends of $26,000. Required: a. Give the journal entries recorded by Trim Corporation during 20X2 on its books if Trim accounts for its investment in Round using the equity method. b. Give the consolidation entries needed at December 31, 20X2, to prepare consolidated financial statements. Complete this question by enter
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