Solution-Prepare the working paper entries E and R

Prepare the working paper entries E and R

Reference no: EM133109003

Question - On January 1, 2021, Peterson Corporation paid $100,000 cash for 10% of the outstanding common stock of Sohn Company. On December 31, 2021, Peterson paid $576,000 cash for 60% of the outstanding common stock of Sohn.

The following information about Sohn Company on January 1, 2021 was available:

	Book value	Fair value
Cash	321,000	321,000
Equipment	532,000	537,000
Total	853,000	858,000
Accounts Payable	3,000	3,000
Long-term debt	100,000	92,000
Common Stock	50,000
Retained Earnings	700,000
Total	853,000

The fair values of Peterson's 10% investment in Sohn and of the noncontrolling interest were $96,000 and $288,000 respectively on December 31, 2021. There was no control premium.

Required -

(i) Prepare the journal entries for Peterson Corporation on December 31, 2021.

(ii) Prepare the working paper entries E and R (in journal entry format) for Peterson Corporation and subsidiary on December 31, 2021.

Reference no: EM133109003

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Prepare the working paper entries E and R

Reference no: EM133109003

Reference no: EM133109003

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