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Unformatted text preview: P4-24 Comprehensive Problem: Consolidation in Subsequent Period$240,000 – 100% (100,000 +100,000) = 40,000BVFMV100%lifeAmort.B&E (net)40,000104,000GoodwillTotal40,000Balance 12/31/x3 = $40,000 – 2(4,000) = $32,000a.Journal entries recorded by Thompson Company:(1)Cash12,000Investment in Lake Corporation Stock12,000Record dividends from subsidiary.(2)Investment in Lake Corporation Stock32,000Income from Subsidiary32,000Record equity-method income.(3)Income from Subsidiary4,000Investment in Lake Corporation Stock4,000Amortize differential: $40,000 / 10 yearsb.Eliminating entries:E(1)Income from Subsidiary28,000Dividends Declared12,000Investment in Lake Corporation Stock16,000Eliminate income from subsidiary.E(2)Common Stock — Lake Corporation100,000Retained Earnings, January 1120,000Differential32,000Investment in Lake Corporation Stock252,000Eliminate beginning investment balance.E(3)Buildings and Equipment40,000Accumulated Depreciation8,000Differential32,000Assign purchase differential.Assign purchase differential....
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- Spring '08
- Generally Accepted Accounting Principles, Lake Corporation, Lake Corporation Stock