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Unformatted text preview: P5-34 Comprehensive Problem: Majority-Owned Subsidiary1/1/x1 160,000 80% (100,000 + 50,000) = 40,00080%TimeBuilding50,00040,000104,000Goodwill40,0001/1/x5 40,000 4(4,000) = 24,000a.Journal entries recorded by Pillar Corporation:(1)Cash8,000Investment in Stanley WoodProducts Stock8,000Record dividends from Stanley WoodProducts: $10,000 x .80(2)Investment in Stanley Wood Products Stock24,000Income from Subsidiary24,000Record equity-method income: $30,000 x .80(3)Income from Subsidiary4,000Investment in Stanley WoodProducts Stock4,000Amortize differential: $40,000 / 10 yearsb.Eliminating entries:E(1)Income from Subsidiary20,000Dividends Declared8,000Investment in Stanley WoodProducts Stock12,000Eliminate income from subsidiary.E(2)Income to Noncontrolling Interest6,000Dividends Declared2,000Noncontrolling Interest4,000Assign income to noncontrolling interest.E(3)Common Stock Stanley Wood Products 100,000Retained Earnings, January 190,000Differential24,000Investment in Stanley Wood...
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- Spring '08