6-40 - P6-40 Intercompany Sale of Equipment in Prior Period...

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Unformatted text preview: P6-40 Intercompany Sale of Equipment in Prior Period at a LossNo differentialEquipment sale F -B 1/1/x71/1/x5 Cost90,000101/1/x7 A/D18,000BV72,00089,000Sales Price48,00086,000Loss24,0003,000Equity method entries:Investment in S54,000Income from S54,000NI 60,000 x 90%Cash18,000Investment in S18,000Dividends 20,000 x 90%a.Eliminating entries:E(1)Income from Subsidiary54,000Dividends Declared18,000 Investment in Block Corporation Stock36,000 Eliminate income from subsidiary.E(2)Income to Noncontrolling Interest5,700Dividends Declared2,000 Noncontrolling Interest3,700 Assign income to noncontrolling interest:NI 60,000less depr 3,000confirmed NI 57,000E(3)Common Stock Block Corporation50,000Retained Earnings, January 1150,000Investment in Block Corporation Stock180,000 Noncontrolling Interest20,000 Eliminate beginning investment balance.P6-40(continued)E(4)Buildings and Equipment42,000Retained Earnings, January 116,200 Noncontrolling Interest1,800 Accumulated Depreciation24,000 Eliminate intercorporate sale of equipment.Eliminate intercorporate sale of equipment....
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6-40 - P6-40 Intercompany Sale of Equipment in Prior Period...

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