Chapter 4-15 - CHAPTER 4 CONSOLIDATED FINANCIAL STATEMENTS...

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CHAPTER 4 CONSOLIDATED FINANCIAL STATEMENTS AND OUTSIDE OWNERSHIP Answers to Problems 28. (30 Minutes) (Consolidation entries and the effect of different investment methods) a. From the original purchase price, $14,000 is assigned based on the fair value of the building ($20,000 × 70%). With a 10year life, excess amortization (depreciation) will be $1,400 per year. Because the equity method is in use, no Entry *C is required. Entry S Common Stock (Barker) . ............................... 300,000 Retained Earnings, 1/1/06 (Barker) . .............. 268,000 Investment in Barker (70%) . ..................... 397,600 Noncontrolling Interest in Barker, 1/1/06 (30%) 170,400 (To eliminate stockholders' equity accounts of subsidiary and recognize outside ownership. Retained earnings figure includes 2004 and 2005 income and dividends.) Entry A Building . .......................................................... 11,200 Goodwill . .............................................................. 60,000 Investment in Barker . ..................................... 71,200 (To recognize unamortized portion of purchase price allocations. Original
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This note was uploaded on 02/08/2012 for the course ACCOUNTING 559 taught by Professor Keating during the Spring '07 term at DeVry Addison.

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Chapter 4-15 - CHAPTER 4 CONSOLIDATED FINANCIAL STATEMENTS...

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