chapter 7 - Requirements: A. Prepare the 20X7 journal...

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Requirements: A. Prepare the 20X7 journal entries recorded on Randall's Book related to its investment in Sharp A128if Randall uses the basic equity method: a.Entries Recorded by Randall on its investment in Sharp: Debit Credit Cash $20,000.00 Investment in Sharp Company Stock $20,000.00 Record Dividends from Sharp: ($25,000 X .80) Investment in Sharp Company Stock #VALUE! Income from Subsidiary #VALUE! Record Equity Method income: (40,000 X .80) Income from Subsidiary $4,000.00 Depreciation Expense $4,000.00 Record Amortize Differential: [(50000/10)*.80] b. Eliminating Entries, December 31, 20X7 E(1) Income from Subsidiary $28,000.00 Dividends Declared $20,000.00 Investment in Shpart Company Stock $8,000.00 Eliminated Income from Subsidiary: (32,000-4,000) E(2) Income to Noncontrolling Interest $6,600.00 Dividends Declared $5,000.00 Noncontrolling Interest $1,600.00 Assign Income to Noncontrolling Interest $6,600.00 = (40,000+8000-10000-5000) X .20 E(3) Common Stock - Sharp Company $100,000.00 Retained Earnings- Sharp Company $215,000.00 Additional Paid-In-Capital $20,000.00 Building $35,000.00 Investment in Sharp Company $296,000.00 Noncontrolling Interest $74,000.00 Eliminating Beginning Investment Balance : (50,000-(50,000/10)X3 years) E(4) Buildings and Equipment $50,000.00 Depreciation Expense $5,000.00 Accumulated Depreciation $20,000.00 Differential $35,000.00 Assigning Differential to Buildings and Equipment $20,000.00 = (50000/10) X 4 years E(5) Retained Earnings, January 1 $6,400.00 Noncontrolling Interest $1,600.00 Cost of Goods Sold
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This note was uploaded on 11/27/2011 for the course ACCOUNTING 401 taught by Professor Massana during the Spring '11 term at Berkeley College.

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chapter 7 - Requirements: A. Prepare the 20X7 journal...

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