View the step-by-step solution to:

On January 1, 2011, Telconnect acquires 70 percent of Bandmor for $490,000 cash. The remaining 30 percent of Bandmor's shares continued to trade at a...

On January 1, 2011, Telconnect acquires 70 percent of Bandmor for $490,000 cash. The remaining 30 percent of Bandmor’s shares continued to trade at a total value of $210,000. The new subsidiary reported common stock of $300,000 on that date, with retained earnings of $180,000. A patent was undervalued in the company’s financial records by $30,000. This patent had a 5-year remaining life. Goodwill of $190,000 was recognized and allocated proportionately to the controlling and noncontrolling interests. Bandmor earns income and pays cash dividends as follows:

2009 $ 75,000 $ 39,000

2010 96,000 44,000
2011 110,000 60,000
On December 31, 2011, Telconnect owes $22,000 to Bandmor
Required:
(a) If Telconnect has applied the equity method, what consolidation entries are needed as of December 31, 2011?

entryS/A/I/D/E/P
(b) If Telconnect has applied the initial value method, what Entry *C is needed for a 2011 consolidation?
(c) If Telconnect has applied the partial equity method, what Entry *C is needed for a 2011 consolidation
(d) What noncontrolling interest balance will appear in consolidated financial statements for 2011?

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question