7-34 - P7-34 Comprehensive Worksheet...

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Unformatted text preview: P7-34 Comprehensive Worksheet ProblemDifferential:1/1/04 280,000 - .80(300,000) = 40,000Buildings & Eq40,000 / 10 = 4,0001/1/07 balance: 40,000 3(4000) = 28,000Inventory:BIP=(60,000 - 40,000) 40%=8,00045,00030,000R --------------S ------------EIP= (45,000 30,000) 2/3 = 10,000 BIP=(26,000 - 20,000) 1/3=2,0009,000 12,000--------- R ------------ S EIP=3,000 Equipment sale R SLifeCost 75,00012A/D 45,00012/31/05Book Val 30,00083,75012/31/05 Sale price 50,00086,250Gain 20,0002,500a.Basic equity-method entries for 20X7:(1)Cash20,000Investment in Sharp Company Stock20,000Record dividend from Sharp Company:$25,000 x .80(2)Investment in Sharp Company Stock32,000Income from Subsidiary32,000Record equity-method income:$40,000 x .80(3)Income from Subsidiary4,000Investment in Sharp Company Stock4,000Amortize differential: $40,000 / 10 yearsb.Eliminating entries, December 31, 20X7:E(1)Income from Subsidiary28,000Dividends Declared20,000Investment in Sharp Company Stock8,000Eliminate income from subsidiary:$28,000 = $32,000 - $4,000E(2)Income to Noncontrolling Interest7,600Dividends Declared5,000Noncontrolling Interest2,600Assign income to noncontrolling interest:$7,600 = ($40,000 + $8,000 - $10,000) x .20E(3)Common Stock Sharp Company100,000Additional Paid-In Capital20,000Retained Earnings, January 1...
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7-34 - P7-34 Comprehensive Worksheet...

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