Calculate controlling interest in consolidated net income

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Question - On October 1, 2017, P. Company purchased 90% of the common stock of S. Company for $290,000. Additional information for both companies for 2017 follows:

 

P

S

Common stock

$300,000

$90,000

Other contributed capital

120,000

40,000

Retained Earnings, 1/1

240,000

50,000

Net Income

260,000

160,000

Dividends declared (10/31)

40,000

8,000

Any difference between implied and book value relates to S's land. P. uses the cost method to record its investment in S. S. Company's income was earned evenly throughout the year.

Required -

A. Prepare the workpaper entries that would be made on a consolidated statements workpaper on December 31, 2017. Use the full year reporting alternative.

B. Calculate the controlling interest in consolidated net income for 2017.

Reference no: EM133093282

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