On June 10, 20X8, Game Corporation acquired 60 percent of Amber Company’s common
ID: 2488321 • Letter: O
Question
On June 10, 20X8, Game Corporation acquired 60 percent of Amber Company’s common stock. The fair value of the noncontrolling interest was $25,600 on that date. Summarized balance sheet data for the two companies immediately after the stock purchase are as follows:
Record the consolidation entries required to prepare a consolidated balance sheet immediately after the purchase of Amber Company shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
On June 10, 20X8, Game Corporation acquired 60 percent of Amber Company’s common stock. The fair value of the noncontrolling interest was $25,600 on that date. Summarized balance sheet data for the two companies immediately after the stock purchase are as follows:
Explanation / Answer
Ans-
a. Equity Method Entries on Game Corp.'s Books: Investment in Amber Corp. 38,400.00 Cash 38,400.00 Record the initial investment in Amber Corp. Book Value Calculations: NCI + Game Corp. = Common + Retained 0.40 0.60 Stock Earnings Ending book value 15,600.00 23,400.00 11,000.00 28,000.00 6/10/X8 Goodwill = 0 Identifiable excess = 15,000 60%Book value =23,400 38,400.00 Initial investment in Amber Corp. Basic elimination entry Common stock 11,000.00 Retained earnings 28,000.00 Investment in Amber Corp. 23,400.00 NCI in NA of Amber Corp. 15,600.00 Excess Value (Differential) Calculations: Book Value Calculations: NCI + Game Corp. = Inventory + Building & 0.40 0.60 Equipment Beginning balances 10,000.00 15,000.00 5,000.00 20,000.00 Inventory 5,000.00 Buildings & Equipment 20,000.00 Investment in Amber Corp 15,000.00 NCI in NA of Amber Corp. 10,000.00Related Questions
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