Question : 75. The adjusted, preclosing trial balances of Parent Company and Sub : 1230371

 

75. The adjusted, preclosing trial balances of Parent Company and Sub Company on December 31, Year 2, appear below. 

 

Parent Company

Sub Company

 

$  4,000

 

$  1,000

 

Accounts Receivable

 

 

 

 

Merchandise Inventory

10,000

 

10,000

 

Investment in Sub Company

9,000

 

 

Land

l,000

 

2,000

 

Buildings and Equipment, net

 

 

5,000

 

Accounts Payable

 

$17,500

 

$12,500

Bonds Payable

 

5,000

 

4,000

Common Stock

 

2,500

 

1,000

Additional Paid-in Capital

 

1,000

 

2,500

Retained Earnings, January 1

 

10,500

 

2,000

Sales

 

35,000

 

25,000

Equity in Earnings of Sub Company

 

5,000

 

Cost of Goods Sold

25,000

 

17,500

 

Selling and Administrative Expenses

5,000

 

2,500

 

Dividends Declared

    2,500

_______

    1,500

           

Totals

$76,500

$76,500

$47,000

$47,000

 

 

 

 

 

Parent Company owns 100 percent of the common stock of Sub Company. It acquired the shares on January 2, Year 1, for an amount equal to the book value of Sub Company’s underlying net assets. On December 31, Year 2, Sub Company owes Parent Company $1,100 arising from short-term working capital loans.Required:Prepare in journal entry form the elimination entries required on December 31, Year 2, to prepare a consolidated financial statement for Parent Company and Sub Company. Note that neither a formal work sheet nor formal financial statements are required. 

76. Pioneer Co. owns 100% of Scout Co. Pioneer has owned Scout since Scout was incorporated. At December 31, $15,000 of Scout’s accounts receivable represent amounts payable by Pioneer. $10,000 of Pioneer’s accounts receivable represent amounts payable by Scout. During the current year, Scout sold $10,000 in merchandise to Pioneer (at cost its cost of $10,000). Pioneer has sold all the merchandise purchased from Scout. 

CONDENSED BALANCE SHEETSAs of December 31

Assets

Pioneer

Scout

Accounts receivable

$     60,000

$  40,000

Investment in Scout (equity)

130,000

Other assets

  1,000,000

  200,000

Total assets

$1,190,000

$240,000

 

 

 

Liabilities and Equity

 

 

Accounts payable

$     50,000

$  20,000 

Other liabilities

640,000

90,000 

Common stock

100,000

150,000 

Retained earnings

     400,000

  (20,000)

Total liabilities and equity

$1,190,000

$240,000

 

 

 

CONDENSED INCOME STATEMENTfor Current Year

 

Pioneer

Scout

Sales

$300,000 

$  90,000 

Equity in earnings of Scout

  (10,000)

           — 

Total revenues

$290,000 

$  90,000 

Cost of goods sold

$160,000 

60,000 

Depreciation

50,000 

20,000 

Other expenses

20,000 

20,000 

Tax expense

    20,000 

           — 

Total expenses

$250,000 

$100,000 

Net income

$  40,000 

$(10,000)

 

 

 

Required:Prepare the appropriate elimination entries necessary to prepare a consolidated balance sheet and income statement. 

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more