Question
On January 1, 2018, Jamison Company purchased 70% of the common stock of Kelly Corporation for...
On January 1, 2018, Jamison Company purchased 70% of the common stock of Kelly Corporation for $455,000. The non-controlling interest was valued at $195,000. The stockholders’ equity of both companies is as follows:
| Jamison Co. | Kelly Co. | |
| Common Stock | 300,000 | 200,000 |
| Retained Earnings | 400,000 | 450,000 |
The income and dividend information for both companies for 2018 is listed below.
| Jamison Co. | Kelly Co. | |
| Net Income | 145,000 | 70,000 |
| Dividends | 50,000 | 40,000 |
Directions: Prepare any necessary consolidation entries for
2018.
Homework Answers
Answer #1
Consolidation entries for 2018:
To Prepare Consolidate financial Statement of 2018:
(i) Consolidate Investment:
Investment in Kelly Corporation = 6,50,000
70%=$455,000
NCI in net assets of Kelly Corporation = 6,50,00030%=$195,000
Stockholders' equity of Kelly Corportion
= Common Stock+ Retained earnings
= 200,000+450,000= $650,000
Investment Consolidation Entry:
| Date | Particulars | Dr. ($) | Cr. ($) |
| Jan 1, 2018 | Common Stock | 200,000 | |
| Retained Earnings | 450,000 | ||
| Investment in Kelly Corp. | 455,000 | ||
| NCI in NA of Kelly Corp. | 195,000 |
(ii) Consolidate Dividend:
Dividend Income = $40,00070%=$28,000
NCI of Kelly Corp.=$40,00030%=$12,000
Dividend Consolidation Entry:
| Date | Particulars | Dr. ($) | Cr. ($) |
| Jan 1, 2018 | Dividend Income | 28,000 | |
| NCI in NA of Kelly Corp | 12,000 | ||
| Dividend Declared | 30,000 |
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