Prepare the consolidation entries using the equity method

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Question - On January 1, 2013, Thunder Corp acquired 80% of Baldwin Corp. It was done by paying $720,000. It included a $30,000 control premium. Baldwin reported common stock of $440,000. Retained earnings of $312,000. Equipment was undervalued by $70,000 (7 year life). Copyright was undervalued by $60,000 (10 year life).

Baldwin had income and dividends of:

Net Income Dividends

2013 $ 110,000 $ 49,000

2014 $ 132,000 $ 70,000

2015 $ 160,000 $ 80,000

On 12/31/13 Thunder owed $42,000 to Baldwin.

Prepare the consolidation entries using the equity method.

Reference no: EM132004407

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