Eliminating entries-non-controlling interest

Assignment Help Accounting Basics

Reference no: EM131090413

EXERCISE 4-5 Eliminating Entries, Non-controlling Interest LO 2

On January 1, 2014, Plate Company purchased a 90% interest in the common stock of Set Company for $650,000, an amount $20,000 in excess of the book value of equity acquired. The excess relates to the understatement of Set Company's land holdings.

Excerpts from the consolidated retained earnings section of the consolidated statements workpaper for the year ended December 31, 2014, follow:

	Set Company	Consolidated Balances
1/1/14 retained earnings	190,000	880,000
Net income from above	132,000	420,000
Dividends declared	(50,000)	(88,000)
12/31/14 retained earnings to the balance sheet	272,000	1,212,000

Set Company's stockholders' equity is composed of common stock and retained earnings only.

Required:

1. Prepare the eliminating entries required for the preparation of a consolidated statements work paper on December 31, 2014, assuming the use of the cost method.
2. Prepare the eliminating entries required for the preparation of a consolidated statements work paper on December 31, 2014, assuming the use of the equity method.
3. Determine the total non-controlling interest that will be reported on the consolidated balance sheet on December 31, 2014. How does the non-controlling interest differ between the cost method and the equity method?

Reference no: EM131090413

Questions Cloud

Two steel mills facing big two-year drop in steel demand : Some companies raise their workers' pay by giving raises, but others prefer to give one-time bonuses instead. Think about two steel mills facing a big two-year drop in steel demand. In one steel mill, workers have received pay raises every year for f..

Draw an aggregate demand and supply diagram for japan : Draw an aggregate demand and supply diagram for Japan.

What is the actuarially fair premium for each type of policy : Chimnesia has two equally sized groups of people: smokers and nonsmokers. Both types of people have utility U = ln(C), where C is the amount of consumption that people have in any period. So long as they are healthy, individuals will consume their en..

Diversity is also desirable for innovation : Discuss the reasons why small businesses are so important to the U.S. economy. Understanding that “Diversity is also desirable for innovation, flexibility, and organizational success,” how does it then play a part in small business success? Please ci..

Eliminating entries-non-controlling interest : On January 1, 2014, Plate Company purchased a 90% interest in the common stock of Set Company for $650,000, an amount $20,000 in excess of the book value of equity acquired. The excess relates to the understatement of Set Company's land holdings.

Define political positions in relation to sexuality : Define political positions in relation to sexuality. Specifically discuss the issues of "traditional morality" and "individual choice."

What are economic arguments against the rule of capture : Describe the rule of capture including the seminal case in which it was first articulated? In the context of trapping foxes from which this case arose, does the rule of capture make sense? What are economic arguments against the rule of capture?

Applied knowledge summary-accountable care organizations : As a summary exercise, use all that you have learned in this course to analyze this case study. Review the following Web resource:

What would be banks'' options to come up with the cash : What would be banks' options to come up with the "cash"?

User Account

All Pages