Phillips Company Purchased a 90% Interest in Standards Corporation for $2,340,000

Essay

Phillips Company purchased a 90% interest in Standards Corporation for $2,340,000 on January 1, 2016. Standards Corporation had $1,650,000 of common stock and $1,050,000 of retained earnings on that date.
The following values were determined for Standards Corporation on the date of purchase: Required:
A. Prepare a computation and allocation schedule for the difference between the implied and book value in the consolidated statements workpaper.
B. Prepare the January 1, 2016, workpaper entries to eliminate the investment account and allocate the difference between implied and book value.