common shares on January 1, 20X2, for $114,800. At that date, the
noncontrolling interest had a fair value of $49,200 and Soda
reported $70,000 of common stock outstanding and retained earnings
of $25,000. The differential is assigned to buildings and
equipment, which had a fair value $22,000 higher than book
value and a remaining 10-year life, and to patents, which had a
fair value $47,000 higher than book value and a remaining life of
five years at the date of the business combination. Trial balances
for the companies as of December 31, 20X3, are as follows:
On December 31, 20X2, Soda purchased inventory for $30,000 and sold
it to Pop for $50,000. Pop resold $29,000 of the inventory (i.e.,
$29,000 of the $50,000 acquired from Soda) during 20X3 and had
the remaining balance in inventory at December 31, 20X3.
During 20X3, Soda sold inventory purchased for $54,000 to Pop for
$90,000, and Pop resold all but $26,000 of its purchase. On March
10, 20X3, Pop sold inventory purchased for $16,000 to Soda for
$32,000. Soda sold all but $8,000 of the inventory prior to
December 31, 20X3. Assume Pop uses the fully adjusted equity
method, that both companies use straight-line depreciation, and
that no property, plant, and equipment has been purchased since the
acquisition.
Required:
a. Prepare all consolidation entries needed to prepare a full set
of consolidated financial statements at December 31, 20X3, for Pop
and Soda. (If no entry is required for a
transaction/event, select "No journal entry required" in the first
account field.)
- Pop Corporation Acquired 70 Percent Of Soda Company S Voting Common Shares On January 1 20x2 For 114 800 At That Dat 1 (71.85 KiB) Viewed 21 times
D E F 4 5 6 Accumulated depreciation Investment in Soda Company NCI NA of Soda Company NCI NA of Soda Company Investment in Soda Company Cost of goods sold NCI in NA of Soda Company Investment in Soda Company Inventory Sales Cost of goods sold Inventory