Business, 28.07.2020 20:01 cesargonzaleztovar60
Public Corporation acquired 90 percent of Station Company’s voting common stock on January 1, 20X1, for $503,100. At the time of the combination, Station reported common stock outstanding of $126,000 and retained earnings of $383,000, and the fair value of the noncontrolling interest was $55,900. The book value of Station’s net assets approximated market value except for patents that had a market value of $50,000 more than their book value. The patents had a remaining economic life of ten years at the date of the business combination. Station reported net income of $70,000 and paid dividends of $23,000 during 20X1.
A. What balance did Major report as its investment in Lancaster at December 31, 20X1, assuming Major uses the equity method in accounting for its investment?
B. Record the basic consolidation entry.
Common stock:
Retained Earnings:
Income from Lancaster comp:
NCI in NI of Lancaster Company
Dividends declared
Investment in Lancaster Company
NCI in NA of Lancaster Company
C. Record the amortized excess value reclassification entry.
D. Record the excess value (differential) reclassification entry.
Patents:
Investment in Lancaster Company:
NCI in NA of Lancaster Company:
Answers: 1
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Public Corporation acquired 90 percent of Station Company’s voting common stock on January 1, 20X1,...
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