P7-28 - P7-28 Consolidation Workpaper 291,200.70(380,000 =...

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P7-28 Consolidation Workpaper 1/1/05 291,200 -  .70 (380,000) = 25,200 70% Land 14,000 9,800 Goodwill 15,400 25,200 Inventory sales: BIP = 30,000 62,000 37,000 --------------W  ------------ EIP= 62,000 - 37,000 = 25,000  54,000 90,000 BIP = 15,000 -------  C ------------ W   EIP= 90,000-54,000 = 36,000 x 20/90 = 8,000 Equipment sale C    W Life 1/1/01 Cost   120,000 15 8,000 A/D     40,000 Book Val     80,000 10 8,000 1/1/06  Sale price     95,000 10 9,500 Gain     15,000 1,500
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1/1/09 AD should be: 40,000 + 3(8000) = 64,000 but is 3(9500)=28,500 difference  35,500 Equity method entries: Investment in S 14,000      Income from S 14,000 Net income (20,000 x 70%) Cash 3,500      Investment in S 3,500 Dividends (5,000 x 70%)   a. Eliminating entries: E(1) Income from Subsidiary 14,000 Dividends Declared 3,500 Investment in West Company Stock 10,500 Eliminate income from subsidiary. E(2) Income to Noncontrolling Interest 7,950 Dividends Declared 1,500 Noncontrolling Interest 6,450 Assign income to noncontrolling interest: $7,950 = ($20,000 + $30,000 - $25,000 + $1,500) x .30 E(3) Common Stock — West Company 150,000 Retained Earnings, January 1 250,000 Differential 25,200 Investment in West Company Stock 305,200
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