Question
34) On January 1, 2017, Prince Company purchased an 80% interest in the common stock of...
34) On January 1, 2017, Prince Company purchased an 80%
interest in the common stock of Sivet Company for $1,040,000, which
was $60,000 greater than the book value of equity acquired. The
difference between implied and book value relates to the
subsidiary’s land.
The following information is from the consolidated retained
earnings section of the consolidated statements workpaper for the
year ended December 31, 2017:
SIVET CONSOLIDATED
COMPANY BALANCES
1/01/17 retained earnings $300,000 $1,400,000
Net income 220,000 680,000
Dividends declared (80,000) (140,000)
12/31/17 retained earnings $440,000 $1,940,000
Sivet’s stockholders’ equity includes only common stock and
retained earnings.
Required:
A. Prepare the workpaper eliminating entries for a
consolidated statements workpaper on December 31, 2017. Prince uses
the cost method.
B. Compute the total noncontrolling interest to be reported on
the consolidated balance sheet on December 31, 2017.
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