Crow Corporation purchased 70 percent of West Company's votingcommon stock on January 1, 20X5, for $296,100. On that date, thenoncontrolling interest had a fair value of $126,900 and the bookvalue of West's net assets was $387,000. The book values and fairvalues of West's assets and liabilities were equal except for landthat had a fair value $14,000 higher than book value. The amountattributed to goodwill as a result of the acquisition is notamortized and has not been impaired.
CROW CORPORATION AND WEST COMPANY
Trial Balance Data
December 31, 20X9 Crow Corporation West Company Item Debit Credit Debit Credit Cash andReceivables $ 99,300 $ 103,000 Inventory 207,000 129,000 Land, Buildings,& Equipment (net) 277,000 257,000 Investment in WestCompany Stock 319,000 Cost of Goods &Services 188,000 138,000 DepreciationExpense 25,000 15,000 DividendsDeclared 20,000 5,000 Sales & ServiceRevenue $ 308,000 $ 208,000 Income fromSubsidiary 54,000 AccountsPayable 56,000 20,000 Common Stock 196,000 157,000 RetainedEarnings 521,300 262,000 Total $ 1,135,300 $ 1,135,300 $ 647,000 $ 647,000
On January 1, 20X9, Crow's inventory contained $50,000 ofunrealized intercompany profits recorded by West. West's inventoryon that date contained $15,000 of unrealized intercompany profitsrecorded on Crowâs books. Both companies sold their ending 20X8inventories to unrelated companies in 20X9.
During 20X9, West sold inventory costing$48,000 to Crow for $73,000. Crow held all inventory purchased fromWest during 20X9 on December 31, 20X9. Also during 20X9, Crow soldgoods costing $75,000 to West for $125,000. West continues to hold$42,500 of its purchase from Crow on December 31, 20X9. Assume Crowuses the fully adjusted equity method.
Required: a. Prepare all consolidation entries needed to complete aconsolidation worksheet as of December 31, 20X9. (If noentry is required for a transaction/event, select "No journal entryrequired" in the first account field.)
b. Prepare a consolidation worksheet as of December 31, 20X9.(Values in the first two columns (the "parent" and"subsidiary" balances) that are to be deducted should be indicatedwith a minus sign, while all values in the "Consolidation Entries"columns should be entered as positive values. For accounts wheremultiple adjusting entries are required, combine all debit entriesinto one amount and enter this amount in the debit column of theworksheet. Similarly, combine all credit entries into one amountand enter this amount in the credit column of theworksheet.)
Crow Corporation purchased 70 percent of West Company's votingcommon stock on January 1, 20X5, for $296,100. On that date, thenoncontrolling interest had a fair value of $126,900 and the bookvalue of West's net assets was $387,000. The book values and fairvalues of West's assets and liabilities were equal except for landthat had a fair value $14,000 higher than book value. The amountattributed to goodwill as a result of the acquisition is notamortized and has not been impaired. |
| CROW CORPORATION AND WEST COMPANY Trial Balance Data December 31, 20X9 | ||||||||
| Crow Corporation | West Company | |||||||
| Item | Debit | Credit | Debit | Credit | ||||
| Cash andReceivables | $ | 99,300 | $ | 103,000 | ||||
| Inventory | 207,000 | 129,000 | ||||||
| Land, Buildings,& Equipment (net) | 277,000 | 257,000 | ||||||
| Investment in WestCompany Stock | 319,000 | |||||||
| Cost of Goods &Services | 188,000 | 138,000 | ||||||
| DepreciationExpense | 25,000 | 15,000 | ||||||
| DividendsDeclared | 20,000 | 5,000 | ||||||
| Sales & ServiceRevenue | $ | 308,000 | $ | 208,000 | ||||
| Income fromSubsidiary | 54,000 | |||||||
| AccountsPayable | 56,000 | 20,000 | ||||||
| Common Stock | 196,000 | 157,000 | ||||||
| RetainedEarnings | 521,300 | 262,000 | ||||||
| Total | $ | 1,135,300 | $ | 1,135,300 | $ | 647,000 | $ | 647,000 |
On January 1, 20X9, Crow's inventory contained $50,000 ofunrealized intercompany profits recorded by West. West's inventoryon that date contained $15,000 of unrealized intercompany profitsrecorded on Crowâs books. Both companies sold their ending 20X8inventories to unrelated companies in 20X9. |
During 20X9, West sold inventory costing$48,000 to Crow for $73,000. Crow held all inventory purchased fromWest during 20X9 on December 31, 20X9. Also during 20X9, Crow soldgoods costing $75,000 to West for $125,000. West continues to hold$42,500 of its purchase from Crow on December 31, 20X9. Assume Crowuses the fully adjusted equity method. |
| Required: | |||||
| a. | Prepare all consolidation entries needed to complete aconsolidation worksheet as of December 31, 20X9. (If noentry is required for a transaction/event, select "No journal entryrequired" in the first account field.)
| ||||
Related questions
Crow Corporation purchased 70 percent of West Company's votingcommon stock on January 1, 20X5, for $301,700. On that date, thenoncontrolling interest had a fair value of $129,300 and the bookvalue of West's net assets was $395,000. The book values and fairvalues of West's assets and liabilities were equal except for landthat had a fair value $14,000 higher than book value. The amountattributed to goodwill as a result of the acquisition is notamortized and has not been impaired. |
| CROW CORPORATION AND WEST COMPANY Trial Balance Data December 31, 20X9 | ||||||||
| Crow Corporation | West Company | |||||||
| Item | Debit | Credit | Debit | Credit | ||||
| Cash andReceivables | $ | 98,300 | $ | 102,000 | ||||
| Inventory | 212,000 | 110,000 | ||||||
| Land, Buildings,& Equipment (net) | 278,000 | 258,000 | ||||||
| Investment in WestCompany Stock | 308,108 | |||||||
| Cost of Goods &Services | 195,000 | 145,000 | ||||||
| DepreciationExpense | 39,000 | 29,000 | ||||||
| DividendsDeclared | 34,000 | 6,000 | ||||||
| Sales & ServiceRevenue | $ | 302,000 | $ | 202,000 | ||||
| Income fromSubsidiary | 27,708 | |||||||
| AccountsPayable | 55,000 | 22,000 | ||||||
| Common Stock | 199,000 | 165,000 | ||||||
| RetainedEarnings | 580,700 | 261,000 | ||||||
| Total | $ | 1,164,408 | $ | 1,164,408 | $ | 650,000 | $ | 650,000 |
On January 1, 20X9, Crow's inventory contained $34,000 ofunrealized intercompany profits recorded by West. West's inventoryon that date contained $15,000 of unrealized intercompany profitsrecorded on Crowâs books. Both companies sold their ending 20X8inventories to unrelated companies in 20X9. |
During 20X9, West sold inventory costing$55,000 to Crow for $80,000. Crow held all inventory purchased fromWest during 20X9 on December 31, 20X9. Also during 20X9, Crow soldgoods costing $58,200 to West for $97,000. West continues to hold$32,980 of its purchase from Crow on December 31, 20X9. Assume Crowuses the fully adjusted equity method. |
| Required: | |
| a. | Prepare all consolidation entries needed to complete aconsolidation worksheet as of December 31, 20X9. (If noentry is required for a transaction/event, select "No journal entryrequired" in the first account field.) |
| b. | Prepare a consolidation worksheet as of December 31, 20X9.(Values in the first two columns (the "parent" and"subsidiary" balances) that are to be deducted should be indicatedwith a minus sign, while all values in the "Consolidation Entries"columns should be entered as positive values. For accounts wheremultiple adjusting entries are required, combine all debit entriesinto one amount and enter this amount in the debit column of theworksheet. Similarly, combine all credit entries into one amountand enter this amount in the credit column of theworksheet.) |
