Show the journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares.

Question

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 4, Problem 44P

a.

To determine

Show the journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares.

a.

Expert Solution

Explanation of Solution

The journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Investment in Company K		$ 301,500
	Cash			$ 300,000
	Additional paid-in Capital from step acquisition			$ 1,500
	(to record allocation of additional 30% investment)

Table: (1)

b.

To determine

Prepare a schedule showing how Company B determined the Investment in Company K balance as of December 31, 2018.

b.

Expert Solution

Explanation of Solution

The schedule showing how Company B determined Investment in Company K balances as of December 31, 2018:

Particulars	Amount
Investment in Company K on 01/01/17	$ 573,000
Equity earnings in 2017 ($150,000 − 20,000) × 60%	$ 78,000
Dividends in 2017 ($80,000 × 60%)	$ (48,000)
Additional acquisition of 30%	$ 301,500
Equity earnings in 2018 ($180,000 − 20,000) × 90%	$ 144,000
Dividends in 2018 ($60,000 × 90%)	$ (54,000)
Investment in Company K on 12/31/18	$ 994,500

Table: (2)

c.

To determine

Prepare a consolidated worksheet for Company B, and Company K for December 31, 2018.

c.

Expert Solution

Explanation of Solution

The consolidated worksheet for Company B, and Company K for December 31, 2018:

Income statement	Company B	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Revenues	$ (402,000)	$ (300,000)				$ (702,000)
Operating expense	$ 200,000	$ 120,000	E 20,000			$ 340,000
Equity in income of Company K	$ (144,000)		I 144,000			$ -
Net income	$ (346,000)	$ (180,000)
Consolidated net income						$ (362,000)
Share of non-controlling interest in net income					$ (16,000)	$ 16,000
Share of controlling interest in net income						$ (346,000)

Balance Sheet
Current assets	$ 224,000	$ 190,000				$ 414,000
Investment in Company K	$ 994,500	$ -	D 54,000	$ 792,000
				$ 112,500
				$ 144,000
Trademarks	$ 106,000	$ 600,000				$ 706,000
Copyrights	$ 210,000	$ 300,000	A 100,000	E 20,000		$ 590,000
Equipment	$ 380,000	$ 110,000				$ 490,000
Goodwill		$ -	A 25,000			$ 25,000
Total assets	$ 1,914,500	$ 1,200,000				$ 2,225,000

Liabilities	$ (453,000)	$ (200,000)				$ (653,000)
Common stock	$ (400,000)	$ (300,000)	$ 300,000			$ (400,000)
Additional paid-in capital	$ (60,000)	$ (80,000)	$ 80,000			$ (60,000)
Additional paid-in capital step-acquisition	$ (1,500)					$ (1,500)
Retained earnings	$ (1,000,000)	$ (620,000)				$ (1,000,000)
Non-controlling interest in Company K				S $12,500
				A $88,000	$ (100,500)
					$ (100,500)	$ (100,500)
Total liabilities and equity	$ (1,914,500)	$ (1,200,000)	$ 1,223,000	$ 1,223,000		$ 2,225,000

Table: (3)

Working note:

Statement of retained earnings	Company B	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Retained earnings on 01/01	$ (797,000)	$ (500,000)	$ 500,000			$ (797,000)
Net Income	$ (346,000)	$ (180,000)				$ (346,000)
Dividends declared	$ 143,000	$ 60,000		D 54,000	$ 6,000	$ 143,000
Retained earnings on 31/12	$ (1,000,000)	$ (620,000)				$ (1,000,000)

Table: (4)

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 4, Problem 44P

a.

To determine

Show the journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares.

a.

Expert Solution

Explanation of Solution

The journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Investment in Company K		$ 301,500
	Cash			$ 300,000
	Additional paid-in Capital from step acquisition			$ 1,500
	(to record allocation of additional 30% investment)

Table: (1)

b.

To determine

Prepare a schedule showing how Company B determined the Investment in Company K balance as of December 31, 2018.

b.

Expert Solution

Explanation of Solution

The schedule showing how Company B determined Investment in Company K balances as of December 31, 2018:

Particulars	Amount
Investment in Company K on 01/01/17	$ 573,000
Equity earnings in 2017 ($150,000 − 20,000) × 60%	$ 78,000
Dividends in 2017 ($80,000 × 60%)	$ (48,000)
Additional acquisition of 30%	$ 301,500
Equity earnings in 2018 ($180,000 − 20,000) × 90%	$ 144,000
Dividends in 2018 ($60,000 × 90%)	$ (54,000)
Investment in Company K on 12/31/18	$ 994,500

Table: (2)

c.

To determine

Prepare a consolidated worksheet for Company B, and Company K for December 31, 2018.

c.

Expert Solution

Explanation of Solution

The consolidated worksheet for Company B, and Company K for December 31, 2018:

Income statement	Company B	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Revenues	$ (402,000)	$ (300,000)				$ (702,000)
Operating expense	$ 200,000	$ 120,000	E 20,000			$ 340,000
Equity in income of Company K	$ (144,000)		I 144,000			$ -
Net income	$ (346,000)	$ (180,000)
Consolidated net income						$ (362,000)
Share of non-controlling interest in net income					$ (16,000)	$ 16,000
Share of controlling interest in net income						$ (346,000)

Balance Sheet
Current assets	$ 224,000	$ 190,000				$ 414,000
Investment in Company K	$ 994,500	$ -	D 54,000	$ 792,000
				$ 112,500
				$ 144,000
Trademarks	$ 106,000	$ 600,000				$ 706,000
Copyrights	$ 210,000	$ 300,000	A 100,000	E 20,000		$ 590,000
Equipment	$ 380,000	$ 110,000				$ 490,000
Goodwill		$ -	A 25,000			$ 25,000
Total assets	$ 1,914,500	$ 1,200,000				$ 2,225,000

Liabilities	$ (453,000)	$ (200,000)				$ (653,000)
Common stock	$ (400,000)	$ (300,000)	$ 300,000			$ (400,000)
Additional paid-in capital	$ (60,000)	$ (80,000)	$ 80,000			$ (60,000)
Additional paid-in capital step-acquisition	$ (1,500)					$ (1,500)
Retained earnings	$ (1,000,000)	$ (620,000)				$ (1,000,000)
Non-controlling interest in Company K				S $12,500
				A $88,000	$ (100,500)
					$ (100,500)	$ (100,500)
Total liabilities and equity	$ (1,914,500)	$ (1,200,000)	$ 1,223,000	$ 1,223,000		$ 2,225,000

Table: (3)

Working note:

Statement of retained earnings	Company B	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Retained earnings on 01/01	$ (797,000)	$ (500,000)	$ 500,000			$ (797,000)
Net Income	$ (346,000)	$ (180,000)				$ (346,000)
Dividends declared	$ 143,000	$ 60,000		D 54,000	$ 6,000	$ 143,000
Retained earnings on 31/12	$ (1,000,000)	$ (620,000)				$ (1,000,000)

Table: (4)

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 4, Problem 44P

a.

To determine

Show the journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares.

a.

Expert Solution

Explanation of Solution

The journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Investment in Company K		$ 301,500
	Cash			$ 300,000
	Additional paid-in Capital from step acquisition			$ 1,500
	(to record allocation of additional 30% investment)

Table: (1)

b.

To determine

Prepare a schedule showing how Company B determined the Investment in Company K balance as of December 31, 2018.

b.

Expert Solution

Explanation of Solution

The schedule showing how Company B determined Investment in Company K balances as of December 31, 2018:

Particulars	Amount
Investment in Company K on 01/01/17	$ 573,000
Equity earnings in 2017 ($150,000 − 20,000) × 60%	$ 78,000
Dividends in 2017 ($80,000 × 60%)	$ (48,000)
Additional acquisition of 30%	$ 301,500
Equity earnings in 2018 ($180,000 − 20,000) × 90%	$ 144,000
Dividends in 2018 ($60,000 × 90%)	$ (54,000)
Investment in Company K on 12/31/18	$ 994,500

Table: (2)

c.

To determine

Prepare a consolidated worksheet for Company B, and Company K for December 31, 2018.

c.

Expert Solution

Explanation of Solution

The consolidated worksheet for Company B, and Company K for December 31, 2018:

Income statement	Company B	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Revenues	$ (402,000)	$ (300,000)				$ (702,000)
Operating expense	$ 200,000	$ 120,000	E 20,000			$ 340,000
Equity in income of Company K	$ (144,000)		I 144,000			$ -
Net income	$ (346,000)	$ (180,000)
Consolidated net income						$ (362,000)
Share of non-controlling interest in net income					$ (16,000)	$ 16,000
Share of controlling interest in net income						$ (346,000)

Balance Sheet
Current assets	$ 224,000	$ 190,000				$ 414,000
Investment in Company K	$ 994,500	$ -	D 54,000	$ 792,000
				$ 112,500
				$ 144,000
Trademarks	$ 106,000	$ 600,000				$ 706,000
Copyrights	$ 210,000	$ 300,000	A 100,000	E 20,000		$ 590,000
Equipment	$ 380,000	$ 110,000				$ 490,000
Goodwill		$ -	A 25,000			$ 25,000
Total assets	$ 1,914,500	$ 1,200,000				$ 2,225,000

Liabilities	$ (453,000)	$ (200,000)				$ (653,000)
Common stock	$ (400,000)	$ (300,000)	$ 300,000			$ (400,000)
Additional paid-in capital	$ (60,000)	$ (80,000)	$ 80,000			$ (60,000)
Additional paid-in capital step-acquisition	$ (1,500)					$ (1,500)
Retained earnings	$ (1,000,000)	$ (620,000)				$ (1,000,000)
Non-controlling interest in Company K				S $12,500
				A $88,000	$ (100,500)
					$ (100,500)	$ (100,500)
Total liabilities and equity	$ (1,914,500)	$ (1,200,000)	$ 1,223,000	$ 1,223,000		$ 2,225,000

Table: (3)

Working note:

Statement of retained earnings	Company B	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Retained earnings on 01/01	$ (797,000)	$ (500,000)	$ 500,000			$ (797,000)
Net Income	$ (346,000)	$ (180,000)				$ (346,000)
Dividends declared	$ 143,000	$ 60,000		D 54,000	$ 6,000	$ 143,000
Retained earnings on 31/12	$ (1,000,000)	$ (620,000)				$ (1,000,000)

Table: (4)

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 4, Problem 44P

a.

To determine

Show the journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares.

a.

Expert Solution

Explanation of Solution

The journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Investment in Company K		$ 301,500
	Cash			$ 300,000
	Additional paid-in Capital from step acquisition			$ 1,500
	(to record allocation of additional 30% investment)

Table: (1)

b.

To determine

Prepare a schedule showing how Company B determined the Investment in Company K balance as of December 31, 2018.

b.

Expert Solution

Explanation of Solution

The schedule showing how Company B determined Investment in Company K balances as of December 31, 2018:

Particulars	Amount
Investment in Company K on 01/01/17	$ 573,000
Equity earnings in 2017 ($150,000 − 20,000) × 60%	$ 78,000
Dividends in 2017 ($80,000 × 60%)	$ (48,000)
Additional acquisition of 30%	$ 301,500
Equity earnings in 2018 ($180,000 − 20,000) × 90%	$ 144,000
Dividends in 2018 ($60,000 × 90%)	$ (54,000)
Investment in Company K on 12/31/18	$ 994,500

Table: (2)

c.

To determine

Prepare a consolidated worksheet for Company B, and Company K for December 31, 2018.

c.

Expert Solution

Explanation of Solution

The consolidated worksheet for Company B, and Company K for December 31, 2018:

Income statement	Company B	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Revenues	$ (402,000)	$ (300,000)				$ (702,000)
Operating expense	$ 200,000	$ 120,000	E 20,000			$ 340,000
Equity in income of Company K	$ (144,000)		I 144,000			$ -
Net income	$ (346,000)	$ (180,000)
Consolidated net income						$ (362,000)
Share of non-controlling interest in net income					$ (16,000)	$ 16,000
Share of controlling interest in net income						$ (346,000)

Balance Sheet
Current assets	$ 224,000	$ 190,000				$ 414,000
Investment in Company K	$ 994,500	$ -	D 54,000	$ 792,000
				$ 112,500
				$ 144,000
Trademarks	$ 106,000	$ 600,000				$ 706,000
Copyrights	$ 210,000	$ 300,000	A 100,000	E 20,000		$ 590,000
Equipment	$ 380,000	$ 110,000				$ 490,000
Goodwill		$ -	A 25,000			$ 25,000
Total assets	$ 1,914,500	$ 1,200,000				$ 2,225,000

Liabilities	$ (453,000)	$ (200,000)				$ (653,000)
Common stock	$ (400,000)	$ (300,000)	$ 300,000			$ (400,000)
Additional paid-in capital	$ (60,000)	$ (80,000)	$ 80,000			$ (60,000)
Additional paid-in capital step-acquisition	$ (1,500)					$ (1,500)
Retained earnings	$ (1,000,000)	$ (620,000)				$ (1,000,000)
Non-controlling interest in Company K				S $12,500
				A $88,000	$ (100,500)
					$ (100,500)	$ (100,500)
Total liabilities and equity	$ (1,914,500)	$ (1,200,000)	$ 1,223,000	$ 1,223,000		$ 2,225,000

Table: (3)

Working note:

Statement of retained earnings	Company B	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Retained earnings on 01/01	$ (797,000)	$ (500,000)	$ 500,000			$ (797,000)
Net Income	$ (346,000)	$ (180,000)				$ (346,000)
Dividends declared	$ 143,000	$ 60,000		D 54,000	$ 6,000	$ 143,000
Retained earnings on 31/12	$ (1,000,000)	$ (620,000)				$ (1,000,000)

Table: (4)

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Answer 5

Chapter 4, Problem 44P

a.

To determine

Show the journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares.

a.

Expert Solution

Explanation of Solution

The journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Investment in Company K		$ 301,500
	Cash			$ 300,000
	Additional paid-in Capital from step acquisition			$ 1,500
	(to record allocation of additional 30% investment)

Table: (1)

b.

To determine

Prepare a schedule showing how Company B determined the Investment in Company K balance as of December 31, 2018.

b.

Expert Solution

Explanation of Solution

The schedule showing how Company B determined Investment in Company K balances as of December 31, 2018:

Particulars	Amount
Investment in Company K on 01/01/17	$ 573,000
Equity earnings in 2017 ($150,000 − 20,000) × 60%	$ 78,000
Dividends in 2017 ($80,000 × 60%)	$ (48,000)
Additional acquisition of 30%	$ 301,500
Equity earnings in 2018 ($180,000 − 20,000) × 90%	$ 144,000
Dividends in 2018 ($60,000 × 90%)	$ (54,000)
Investment in Company K on 12/31/18	$ 994,500

Table: (2)

c.

To determine

Prepare a consolidated worksheet for Company B, and Company K for December 31, 2018.

c.

Expert Solution

Explanation of Solution

The consolidated worksheet for Company B, and Company K for December 31, 2018:

Income statement	Company B	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Revenues	$ (402,000)	$ (300,000)				$ (702,000)
Operating expense	$ 200,000	$ 120,000	E 20,000			$ 340,000
Equity in income of Company K	$ (144,000)		I 144,000			$ -
Net income	$ (346,000)	$ (180,000)
Consolidated net income						$ (362,000)
Share of non-controlling interest in net income					$ (16,000)	$ 16,000
Share of controlling interest in net income						$ (346,000)

Balance Sheet
Current assets	$ 224,000	$ 190,000				$ 414,000
Investment in Company K	$ 994,500	$ -	D 54,000	$ 792,000
				$ 112,500
				$ 144,000
Trademarks	$ 106,000	$ 600,000				$ 706,000
Copyrights	$ 210,000	$ 300,000	A 100,000	E 20,000		$ 590,000
Equipment	$ 380,000	$ 110,000				$ 490,000
Goodwill		$ -	A 25,000			$ 25,000
Total assets	$ 1,914,500	$ 1,200,000				$ 2,225,000

Liabilities	$ (453,000)	$ (200,000)				$ (653,000)
Common stock	$ (400,000)	$ (300,000)	$ 300,000			$ (400,000)
Additional paid-in capital	$ (60,000)	$ (80,000)	$ 80,000			$ (60,000)
Additional paid-in capital step-acquisition	$ (1,500)					$ (1,500)
Retained earnings	$ (1,000,000)	$ (620,000)				$ (1,000,000)
Non-controlling interest in Company K				S $12,500
				A $88,000	$ (100,500)
					$ (100,500)	$ (100,500)
Total liabilities and equity	$ (1,914,500)	$ (1,200,000)	$ 1,223,000	$ 1,223,000		$ 2,225,000

Table: (3)

Working note:

Statement of retained earnings	Company B	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Retained earnings on 01/01	$ (797,000)	$ (500,000)	$ 500,000			$ (797,000)
Net Income	$ (346,000)	$ (180,000)				$ (346,000)
Dividends declared	$ 143,000	$ 60,000		D 54,000	$ 6,000	$ 143,000
Retained earnings on 31/12	$ (1,000,000)	$ (620,000)				$ (1,000,000)

Table: (4)

Answer 6

Chapter 4, Problem 44P

a.

To determine

Show the journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares.

a.

Expert Solution

Explanation of Solution

The journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Investment in Company K		$ 301,500
	Cash			$ 300,000
	Additional paid-in Capital from step acquisition			$ 1,500
	(to record allocation of additional 30% investment)

Table: (1)

Answer 7

Chapter 4, Problem 44P

a.

To determine

Show the journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares.

Answer 8

a.

Expert Solution

Explanation of Solution

The journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares:

Date	Accounts Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Investment in Company K		$ 301,500
	Cash			$ 300,000
	Additional paid-in Capital from step acquisition			$ 1,500
	(to record allocation of additional 30% investment)

Table: (1)

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

b.

To determine

Prepare a schedule showing how Company B determined the Investment in Company K balance as of December 31, 2018.

b.

Expert Solution

Explanation of Solution

The schedule showing how Company B determined Investment in Company K balances as of December 31, 2018:

Particulars	Amount
Investment in Company K on 01/01/17	$ 573,000
Equity earnings in 2017 ($150,000 − 20,000) × 60%	$ 78,000
Dividends in 2017 ($80,000 × 60%)	$ (48,000)
Additional acquisition of 30%	$ 301,500
Equity earnings in 2018 ($180,000 − 20,000) × 90%	$ 144,000
Dividends in 2018 ($60,000 × 90%)	$ (54,000)
Investment in Company K on 12/31/18	$ 994,500

Table: (2)

Answer 13

b.

To determine

Prepare a schedule showing how Company B determined the Investment in Company K balance as of December 31, 2018.

Answer 14

b.

Expert Solution

Explanation of Solution

The schedule showing how Company B determined Investment in Company K balances as of December 31, 2018:

Particulars	Amount
Investment in Company K on 01/01/17	$ 573,000
Equity earnings in 2017 ($150,000 − 20,000) × 60%	$ 78,000
Dividends in 2017 ($80,000 × 60%)	$ (48,000)
Additional acquisition of 30%	$ 301,500
Equity earnings in 2018 ($180,000 − 20,000) × 90%	$ 144,000
Dividends in 2018 ($60,000 × 90%)	$ (54,000)
Investment in Company K on 12/31/18	$ 994,500

Table: (2)

Answer 15

b.

Expert Solution

Answer 16

b.

Expert Solution

Answer 17

Expert Solution

Answer 18

c.

To determine

Prepare a consolidated worksheet for Company B, and Company K for December 31, 2018.

c.

Expert Solution

Explanation of Solution

The consolidated worksheet for Company B, and Company K for December 31, 2018:

Income statement	Company B	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Revenues	$ (402,000)	$ (300,000)				$ (702,000)
Operating expense	$ 200,000	$ 120,000	E 20,000			$ 340,000
Equity in income of Company K	$ (144,000)		I 144,000			$ -
Net income	$ (346,000)	$ (180,000)
Consolidated net income						$ (362,000)
Share of non-controlling interest in net income					$ (16,000)	$ 16,000
Share of controlling interest in net income						$ (346,000)

Balance Sheet
Current assets	$ 224,000	$ 190,000				$ 414,000
Investment in Company K	$ 994,500	$ -	D 54,000	$ 792,000
				$ 112,500
				$ 144,000
Trademarks	$ 106,000	$ 600,000				$ 706,000
Copyrights	$ 210,000	$ 300,000	A 100,000	E 20,000		$ 590,000
Equipment	$ 380,000	$ 110,000				$ 490,000
Goodwill		$ -	A 25,000			$ 25,000
Total assets	$ 1,914,500	$ 1,200,000				$ 2,225,000

Liabilities	$ (453,000)	$ (200,000)				$ (653,000)
Common stock	$ (400,000)	$ (300,000)	$ 300,000			$ (400,000)
Additional paid-in capital	$ (60,000)	$ (80,000)	$ 80,000			$ (60,000)
Additional paid-in capital step-acquisition	$ (1,500)					$ (1,500)
Retained earnings	$ (1,000,000)	$ (620,000)				$ (1,000,000)
Non-controlling interest in Company K				S $12,500
				A $88,000	$ (100,500)
					$ (100,500)	$ (100,500)
Total liabilities and equity	$ (1,914,500)	$ (1,200,000)	$ 1,223,000	$ 1,223,000		$ 2,225,000

Table: (3)

Working note:

Statement of retained earnings	Company B	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Retained earnings on 01/01	$ (797,000)	$ (500,000)	$ 500,000			$ (797,000)
Net Income	$ (346,000)	$ (180,000)				$ (346,000)
Dividends declared	$ 143,000	$ 60,000		D 54,000	$ 6,000	$ 143,000
Retained earnings on 31/12	$ (1,000,000)	$ (620,000)				$ (1,000,000)

Table: (4)

Answer 19

c.

To determine

Prepare a consolidated worksheet for Company B, and Company K for December 31, 2018.

Answer 20

c.

Expert Solution

Explanation of Solution

The consolidated worksheet for Company B, and Company K for December 31, 2018:

Income statement	Company B	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Revenues	$ (402,000)	$ (300,000)				$ (702,000)
Operating expense	$ 200,000	$ 120,000	E 20,000			$ 340,000
Equity in income of Company K	$ (144,000)		I 144,000			$ -
Net income	$ (346,000)	$ (180,000)
Consolidated net income						$ (362,000)
Share of non-controlling interest in net income					$ (16,000)	$ 16,000
Share of controlling interest in net income						$ (346,000)

Balance Sheet
Current assets	$ 224,000	$ 190,000				$ 414,000
Investment in Company K	$ 994,500	$ -	D 54,000	$ 792,000
				$ 112,500
				$ 144,000
Trademarks	$ 106,000	$ 600,000				$ 706,000
Copyrights	$ 210,000	$ 300,000	A 100,000	E 20,000		$ 590,000
Equipment	$ 380,000	$ 110,000				$ 490,000
Goodwill		$ -	A 25,000			$ 25,000
Total assets	$ 1,914,500	$ 1,200,000				$ 2,225,000

Liabilities	$ (453,000)	$ (200,000)				$ (653,000)
Common stock	$ (400,000)	$ (300,000)	$ 300,000			$ (400,000)
Additional paid-in capital	$ (60,000)	$ (80,000)	$ 80,000			$ (60,000)
Additional paid-in capital step-acquisition	$ (1,500)					$ (1,500)
Retained earnings	$ (1,000,000)	$ (620,000)				$ (1,000,000)
Non-controlling interest in Company K				S $12,500
				A $88,000	$ (100,500)
					$ (100,500)	$ (100,500)
Total liabilities and equity	$ (1,914,500)	$ (1,200,000)	$ 1,223,000	$ 1,223,000		$ 2,225,000

Table: (3)

Working note:

Statement of retained earnings	Company B	Company K	Debit	Credit	Non-controlling interest	Consolidated Balances
Retained earnings on 01/01	$ (797,000)	$ (500,000)	$ 500,000			$ (797,000)
Net Income	$ (346,000)	$ (180,000)				$ (346,000)
Dividends declared	$ 143,000	$ 60,000		D 54,000	$ 6,000	$ 143,000
Retained earnings on 31/12	$ (1,000,000)	$ (620,000)				$ (1,000,000)

Table: (4)

Answer 21

c.

Expert Solution

Answer 22

c.

Expert Solution

Answer 23

Expert Solution

Answer 24

Ch. 4 - Prob. 1Q Ch. 4 - Atwater Company acquires 80 percent of the...Ch. 4 - What is a control premium and how does it affect...Ch. 4 - Prob. 4Q Ch. 4 - How is the noncontrolling interest in a subsidiary...Ch. 4 - Prob. 6Q Ch. 4 - Prob. 7Q Ch. 4 - Prob. 8Q Ch. 4 - Prob. 9Q Ch. 4 - Prob. 10Q

Show the journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares.

Concept explainers

Show the journal entry Company B made to record its January 1, 2018, acquisition of an additional 30 percent of Company K shares.

Explanation of Solution

Prepare a schedule showing how Company B determined the Investment in Company K balance as of December 31, 2018.

Explanation of Solution

Prepare a consolidated worksheet for Company B, and Company K for December 31, 2018.

Explanation of Solution

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