5-34 - P5-34 Comprehensive Problem Majority-Owned...

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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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This note was uploaded on 04/18/2008 for the course ACCT cost taught by Professor Staff during the Spring '08 term at Oklahoma State.

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5-34 - P5-34 Comprehensive Problem Majority-Owned...

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