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Unformatted text preview: P7-32 Intercorporate Transfers of Inventory and Equipment1/1/05No differentialEquipment sale F BLife1/1/05Cost 90,00010A/D 18,000Book Val 72,00089,0001/1/07 Sale price 48,00086,000LOSS 24,0003,000BIP=75,000-60,000=15,00030,00020,000F --------------B ------------EIP= 10,000 x 40% = 4,000 Equity method entries:Investment in S63,000 Income from S63,000Net income (70,000 x 90%)Cash18,000 Investment in S18,000Dividends (20,000 x 90%)f.Eliminating entries:E(1)Income from Subsidiary63,000Dividends Declared18,000 Investment in Block Corporation Stock45,000 Eliminate income from subsidiary.E(2)Income to Noncontrolling Interest7,800Dividends Declared2,000 Noncontrolling Interest5,800 Assign income to noncontrolling interest.70,000+15,000-4,000-3,000=78,000 x 10%=7,800E(3)Common Stock — Block Corporation50,000Retained Earnings, January 1165,000Investment in Block Corporation Stock193,500 Noncontrolling Interest...
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- Spring '08
- Generally Accepted Accounting Principles, Block Corporation, Block Corporation Stock