On January 1, 20X1, Parent Company Purchased 85% of the Common

Essay

On January 1, 20X1, Parent Company purchased 85% of the common stock, 8,500 shares, of Subsidiary Company for $317,500. On this date, Subsidiary had common stock, other paid-in capital, and retained earnings of $50,000, $100,000, and $200,000 respectively. Any excess of cost over book value is due to goodwill.
On January 1, 20X2, Subsidiary purchased, from its noncontrolling shareholders, 1,000 shares of its common stock, 10% of the stock outstanding on that date. The price paid was $44,000. The trial balances of Parent and Sub as of 12/31/X2 are given below:
Required (round all amounts to whole dollars; round percentages to one decimal: XX.X%)
a.
Prepare the D&D schedule for the 1/1/X1 acquisition.
b.
Prepare a schedule to determine the change in Parent's interest in Sub.
c.
Prepare all journal entries for Parent for the year ended 12/31/X2
d.
Prepare, in journal form, all elimination entries necessary for the 12/31/X2 consolidation worksheet.