princess company acquired a 90 interest in sundown company on january 1 2011 for 675 4373002

Princess Company acquired a 90% interest in Sundown Company on January 1, 2011, for $675,000. Any excess of cost over book value was due to goodwill. Capital balances of Sundown Company on January 1, 2011, were as follows: Common stock ($10 par) ……. $200,000 Paid-in capital in excess of par …. 100,000 Retained earnings ……… 300,000 Total equity …………. $600,000 Sundown Company sold a machine to Princess for $30,000 on January 1, 2014. It cost Sun-down $20,000 to build the machine, which had a 5-year remaining life on the date of the sale and is subject to straight-line depreciation. Princess purchased one-half of the outstanding 9% bonds of Sundown for $89,186 (to yield 12%) on December 31, 2015. The bonds were sold originally by Sundown to yield 10% to out-side parties. The discount on the entire set of bonds was $7,582 on December 31, 2015. The effective interest method of amortization is used. During 2016, Princess Company sold merchandise to Sundown for $50,000. Princess recorded a 30% gross profit on the sales price. $20,000 of the merchandise purchased from Princess remains unsold at the end of the year. The trial balances of Princess and its subsidiary, Sundown, are as follows on December 31, 2016: Required Prepare the worksheet necessary to produce the consolidated financial statements of Princess Company and its subsidiary for the year ended December 31, 2016. Include the determination and distribution of excess and income distribution schedules. View Solution:
Princess Company acquired a 90 interest in Sundown Company on

Related Articles

armstrong helmet company 239138

Armstrong Helmet Company manufactures a unique model of bicycle helmet Question Case project Learning Objectives: Prepare practical applications of course concepts Develop analytical and critical thinking Develop decision-making capabilities Enhance professional...

read more

Open chat
Need help? We are Online 24/7
Hello 👋
Can we help you?