E5-12 - E5-12 Consolidation after One Year of...

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Unformatted text preview: E5-12 Consolidation after One Year of Ownership .a :Eliminating entries, January 1, 20X2 (E(1 Common Stock — Lowe Corporation Retained Earnings, January 1 Differential Investment in Lowe Corporation Stock Noncontrolling Interest .Eliminate investment balance Computation of differential Purchase Price (Underlying book value ($200,000 x .80 Differential (E(2 Buildings and Equipment Goodwill Differential :Assign differential x .80 $32,000 = $25,600 $25,600 - $30,000 = $4,400 $190,000 (160,000) 30,000 $ 25,600 4,400 120,000 80,000 30,000 190,000 40,000 30,000 .b :Eliminating entries, December 31, 20X2 (E(1 Income from Subsidiary Investment in Lowe Corporation Stock .Eliminate income from subsidiary Computation of income from subsidiary Reported net income of Lowe Proportion of stock acquired Income before amortizing differential Amortization of differential assigned to (buildings and equipment ($25,600 / 8 Income from subsidiary for 20X2 $40,000 x .80 $32,000 (3,200) $28,800 28,800 28,800 ...
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This note was uploaded on 02/19/2011 for the course ACC 440 taught by Professor Henderson during the Spring '08 term at University of Phoenix.

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