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 |
Not the answer you're looking for?
Similar Questions
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.
On January 1, 20X1, Parent Company purchased 80% of the common stock of Subsidiary Company for...
On January 1, 20X1, Parent Company purchased 80% of the common
stock of Subsidiary Company for $316,000. On this date, Subsidiary
had common stock, other paid-in capital, and retained earnings of
$40,000, $120,000, and $190,000, respectively. Net income and
dividends for 2 years for Subsidiary Company were as follows:
20X1 20X2
Net income $50,000 $90,000
Dividends 10,000 20,000
On January 1, 20X1, the only tangible assets of Subsidiary that
were undervalued were inventory and building. Inventory, for which
FIFO is...
7. On January 2, 2018, Howdy Doody Corporation purchased 10% of Ranger Corporation's common stock for...
7. On January 2, 2018, Howdy Doody Corporation purchased 10% of
Ranger Corporation's common stock for $60,000. Ranger's net income
for the years ended December 31, 2018 and 2019, were $50,000 and
$100,000, respectively. During 2018, Ranger declared and paid a
dividend of $50,000. There were no dividends in 2019. On December
31, 2018, the fair value of the Ranger stock owned by Howdy Doody
had increased to $80,000. How much should Howdy Doody show in the
2018 income statement...
PAM Co. acquired all of the common stock of Sista Co. on January 1, 2017. As...
PAM Co. acquired all of the common stock of Sista Co. on January
1, 2017. As of that date, Sista had the following trial
balance:
Debit
Credit
Accounts payable
$
60,000
Accounts receivable
$
50,000
Additional paid-in capital
60,000
Buildings (net) (20-year life)
140,000
Cash and short-term investments
70,000
Common stock
300,000
Equipment (net) (8-year life)
240,000
Intangible assets (indefinite life)
110,000
Land
90,000
Long-term liabilities (mature 12/31/19)
180,000
Retained earnings, 1/1/17
120,000
Supplies
20,000
Totals
$
720,000
$
720,000...
Lucky’s Company acquires Waterview, Inc., by issuing 40,000 shares of $1 par common stock with a...
Lucky’s Company acquires Waterview, Inc., by issuing 40,000
shares of $1 par common stock with a market price of $25 per share
on the acquisition date and paying $125,000 cash. The assets and
liabilities on Waterview’s balance sheet were valued at fair values
except equipment that was undervalued by $300,000. There was also
an unrecorded patent valued at $40,000, as well as an unrecorded
trademark valued at $75,000. In addition, the agreement provided
for additional consideration, valued at $60,000, if...
On January 1, 2020, Jordan Inc. purchased 25% of the outstanding common stock of Melody Corporation...
On January 1, 2020, Jordan Inc. purchased 25% of the outstanding
common stock of Melody Corporation at a cost of $450,000. Melody
Corporation had 400,000 shares of common stock outstanding. At the
date of purchase, the book value of Melody’s net assets was
$1,500,000. Book value and fair value of net assets were the same
for all balance sheet items except for machinery and inventory. The
fair value exceeded the book value by $100,000 for machinery and
$20,000 for the...
On January 1, 20X9, Peery Company acquired 100 percent of Standard Company's common shares at underlying...
On January 1, 20X9, Peery Company acquired 100 percent of
Standard Company's common shares at underlying book value. Peery
uses the equity method in accounting for its ownership of Standard.
On December 31, 20X9, the trial balances of the two companies are
as follows:
Peery Co.
Standard Co.
Item
Debit
Credit
Debit
Credit
Current Assets $ 238,000
$
95,000
Depreciable Assets
300,000
170,000
Investment...
On December 31, 200X P Corporation paid $300,000 cash for 80% of the common stock of...
On December 31, 200X P Corporation paid $300,000 cash for 80% of
the
common stock of S Company which becomes a subsidiary.
Following
information is shown prior to the acquisition being
recorded:
P Company
Assets
Liabilities and Equity
Cash
580,000
Liabilities
90,000
Inventories
60,000
Plant
340,000
Common Stock, $5pv
100,000
Paid in Capital
200,000
Retained Earnings
590,000
Total
980,000
Total
980,000
S Company
Assets
Liabilities and Equity
Inventories
20,000
Liabilities
30,000
Other assets
40,000
Long Term Debt
50,000
Plant
140,000...
On July 1, 2018, Truman Company acquired a 70 percent interest in Atlanta Company in exchange...
On July 1, 2018, Truman Company acquired a 70 percent interest
in Atlanta Company in exchange for consideration of $788,900 in
cash and equity securities. The remaining 30 percent of Atlanta’s
shares traded closely near an average price that totaled $338,100
both before and after Truman’s acquisition.
In reviewing its acquisition, Truman assigned a $129,500 fair
value to a patent recently developed by Atlanta, even though it was
not recorded within the financial records of the subsidiary. This
patent is...
On January 1, 2016, Monica Company acquired 70 percent of Young Company’s outstanding common stock for...
On January 1, 2016, Monica Company acquired 70 percent of Young
Company’s outstanding common stock for $665,000. The fair value of
the noncontrolling interest at the acquisition date was
$285,000.
Young reported stockholders’ equity accounts on that date as
follows:
Common stock—$10 par value
$
300,000
Additional paid-in capital
90,000
Retained earnings
410,000
In establishing the acquisition value, Monica appraised Young's
assets and ascertained that the accounting records undervalued a
building (with a five-year remaining life) by $50,000. Any
remaining...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 42 minutes ago
asked 42 minutes ago
asked 52 minutes ago
asked 54 minutes ago
asked 59 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 2 hours ago
asked 2 hours ago
asked 2 hours ago
asked 2 hours ago