On January 1, 2019, Parent Company Purchased 90% of the Common

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The Answer is Answer 5-4.
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$Answer 5-4. ? ? ? Determination and Distribution of Excess Schedule: ? Eliminations and Adjustments: ? *Bond purchase amount was $97,000 + $300 amortization of discount ($3,000 / 10). (CV) Convert to simple equity method as of January 1,2021 (90\% of \$ 50,000 increase in Sub's retained earnings from January 1,2019 to January 1, 2021). (CY) Eliminate Parent's dividend income against dividends declared by Subsidiary. (EL) Eliminate 90 \% of the Subsidiary Company equity balances at the begiming of the year against the investment account. (D) Distribute the \$ 150,000 excess of cost over book value to goodwill; allocate to Parent and NCI. (B.1) Fliminate \$ 3,000 of intercompany interest receivable and payable (\$ 100,000 imes 6 \% imes 1 / 2) (B2) Eliminate all of the intercompany interest income and expense. Eliminate the balances in investment in bonds, bonds payable, and discount on bonds payable. The resulting gain of \$ 900 is the gain as of beginning of year: on January 1,2021 \$ 97,300^{*} carrying value of bonds less \$ 96,400 purchase price. ? ? ?$ ?
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$Answer 5-4. ? ? ? Determination and Distribution of Excess Schedule: ? Eliminations and Adjustments: ? *Bond purchase amount was $97,000 + $300 amortization of discount ($3,000 / 10). (CV) Convert to simple equity method as of January 1,2021 (90\% of \$ 50,000 increase in Sub's retained earnings from January 1,2019 to January 1, 2021). (CY) Eliminate Parent's dividend income against dividends declared by Subsidiary. (EL) Eliminate 90 \% of the Subsidiary Company equity balances at the begiming of the year against the investment account. (D) Distribute the \$ 150,000 excess of cost over book value to goodwill; allocate to Parent and NCI. (B.1) Fliminate \$ 3,000 of intercompany interest receivable and payable (\$ 100,000 imes 6 \% imes 1 / 2) (B2) Eliminate all of the intercompany interest income and expense. Eliminate the balances in investment in bonds, bonds payable, and discount on bonds payable. The resulting gain of \$ 900 is the gain as of beginning of year: on January 1,2021 \$ 97,300^{*} carrying value of bonds less \$ 96,400 purchase price. ? ? ?$ Determination and Distribution of Excess Schedule:
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$Answer 5-4. ? ? ? Determination and Distribution of Excess Schedule: ? Eliminations and Adjustments: ? *Bond purchase amount was $97,000 + $300 amortization of discount ($3,000 / 10). (CV) Convert to simple equity method as of January 1,2021 (90\% of \$ 50,000 increase in Sub's retained earnings from January 1,2019 to January 1, 2021). (CY) Eliminate Parent's dividend income against dividends declared by Subsidiary. (EL) Eliminate 90 \% of the Subsidiary Company equity balances at the begiming of the year against the investment account. (D) Distribute the \$ 150,000 excess of cost over book value to goodwill; allocate to Parent and NCI. (B.1) Fliminate \$ 3,000 of intercompany interest receivable and payable (\$ 100,000 imes 6 \% imes 1 / 2) (B2) Eliminate all of the intercompany interest income and expense. Eliminate the balances in investment in bonds, bonds payable, and discount on bonds payable. The resulting gain of \$ 900 is the gain as of beginning of year: on January 1,2021 \$ 97,300^{*} carrying value of bonds less \$ 96,400 purchase price. ? ? ?$ Eliminations and Adjustments:
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*Bond purchase amount was $97,000 + $300 amortization of discount ($3,000 / 10).
(CV) Convert to simple equity method as of January 1,2021 (90\% of

\$ 50,000

increase in Sub's retained earnings from January 1,2019 to January 1, 2021).
(CY) Eliminate Parent's dividend income against dividends declared by Subsidiary.
(EL) Eliminate

90 \%

of the Subsidiary Company equity balances at the begiming of the year against the investment account.
(D) Distribute the

\$ 150,000

excess of cost over book value to goodwill; allocate to Parent and NCI.
(B.1) Fliminate

\$ 3,000

of intercompany interest receivable and payable

(\$ 100,000 imes 6 \% imes 1 / 2)

(B2) Eliminate all of the intercompany interest income and expense. Eliminate the balances in investment in bonds, bonds payable, and discount on bonds payable. The resulting gain of

\$ 900

is the gain as of beginning of year: on January

1,2021 \$ 97,300^{*}

carrying value of bonds less

\$ 96,400

purchase price. ?
?
$Answer 5-4. ? ? ? Determination and Distribution of Excess Schedule: ? Eliminations and Adjustments: ? *Bond purchase amount was $97,000 + $300 amortization of discount ($3,000 / 10). (CV) Convert to simple equity method as of January 1,2021 (90\% of \$ 50,000 increase in Sub's retained earnings from January 1,2019 to January 1, 2021). (CY) Eliminate Parent's dividend income against dividends declared by Subsidiary. (EL) Eliminate 90 \% of the Subsidiary Company equity balances at the begiming of the year against the investment account. (D) Distribute the \$ 150,000 excess of cost over book value to goodwill; allocate to Parent and NCI. (B.1) Fliminate \$ 3,000 of intercompany interest receivable and payable (\$ 100,000 imes 6 \% imes 1 / 2) (B2) Eliminate all of the intercompany interest income and expense. Eliminate the balances in investment in bonds, bonds payable, and discount on bonds payable. The resulting gain of \$ 900 is the gain as of beginning of year: on January 1,2021 \$ 97,300^{*} carrying value of bonds less \$ 96,400 purchase price. ? ? ?$ ?

On January 1, 2019, Parent Company Purchased 90% of the Common

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On January 1, 2019, Parent Company Purchased 90% of the Common

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Correct Answer:
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