Consollidation at the end of the first year subsequent to date of Asume thux a p
ID: 2404342 • Letter: C
Question
Consollidation at the end of the first year subsequent to date of Asume thux a parent company acquires is subsidiary on January 1, 2016, by exchanging 40,000 shares of its $1 par walue Common Stock, with a market value on the acquisition date of 28 per share, for all of the outstanding veting shares of the acquiree You have been Cost of goods sold 2.672.0000 0 00072,000 Aceures necelvable Equity inceme Operating esperses 318920 $145,200 2,245 2 316660 6 160 of retained eanings 7,20 209,40 Ceemen 414 40012,000 948400 4000 330 240 1067.0 General journal Common soack tional paid paid in capitalExplanation / Answer
b)
enteries:
Beginning RE of subsiduary = Ending Retained earning -Current year income+dividend
= 1067920-235200. +35280
= 868000
Equity investment at 1/1/16 1120000 plus: share in net income of subsidary 235200 less: Dividend income 35280 Equity investment at 12/31/16 1319920