Prepare consolidated financial statements

Assignment Help Accounting Basics

Reference no: EM13766344

Magellan Corporation acquired 80 percent ownership of Dipper Corporation on January 1, 20X8, for $200,000. At that date, Dipper reported common stock outstanding of $75,000 and retained earnings of $150,000. The fair value of the noncontrolling interest was $50,000. The differential is assigned to equipment, which had a fair value $25,000 greater than book value and a remaining economic life of five years at the date of the business combination. Canton Dipper reported net income of $40,000 and paid dividends of $20,000 in 20X8.

Provide the following:

1. The journal entries recorded by Magellan during 20X8 on its books if it accounts for its investment in Dipper using the equity method.

2. The eliminating entries needed at December 31, 20X8, to prepare consolidated financial statements.

Reference no: EM13766344

Questions Cloud

Market value and the face value of the zero-coupon bond : You will be paying $10,000 a year in education expenses at the end of the next two years. Currently the yield curve is flat at 8%. If you want to fully fund and immunize your obligation with a single issue of a zero-coupon bond, what maturity bond mu..

Initial cost probability net revenue probability : A project has a life of 10 years, and no salvage value. The firm uses an interest rate of 12% to evaluate projects. This project has an uncertain initial cost and net revenue as below. A. Joint probability distribution for cost and net revenue B.

What is primroses cash conversion cycle : Primrose Corp has $17 million of sales, $3 million of inventories, $4 million of receivables, and $1 million of payables. Its cost of goods sold is 65% of sales, and it finances working capital with bank loans at an 9% rate. What is Primrose's cash c..

What is the maximum profit and loss for this position : An investor purchases a stock for $53 and a put option for $.65 with a strike price of $49. The investor also sells a call option for $.65 with a strike price of $60. What is the maximum profit and loss for this position?

Prepare consolidated financial statements : The journal entries recorded by Magellan during 20X8 on its books if it accounts for its investment in Dipper using the equity method. The eliminating entries needed at December 31, 20X8, to prepare consolidated financial statements.

Potential major corporate investments : The process of selecting among potential major corporate investments is called capital budgeting. The goal of the capital budgeting decisions is to select capital projects that will decrease the value of the firm.

Market value of chief corporation on the date of declaration : On October 1, 2013, Chief Corporation declared and issued a 14% stock dividend. Before this date, Chief had 89,000 shares of $5 par common stock outstanding. The market value of Chief Corporation on the date of declaration was $10 per share. As a res..

Explain functions and role of law in business and society : Write a 700- to 1,050-word paper in which you define the functions and role of law in business and society. Discuss the functions and role of law in your past or present job or industry

Dividends per share payable to prefer and common : Beagle Corporation has 23,000 shares of $10 par common stock outstanding and 17,000 shares of $100 par, 4.50% cumulative, non participating preferred stock outstanding. Dividends have not been paid for the past two years. This year, a $440,000 divide..

User Account

All Pages