Problem 1-7 Your answer is partially correct. Try again. Price Company purchased

Question

Problem 1-7 Your answer is partially correct. Try again. Price Company purchased 90% o the outstanding common stock o Score Company on January 1, 2011, or $446,220. At that time, Score Company had stockholders' equity consisting o common stock $199,200; other contributed capital, $161,000; and retained earnings, $89,200. On December 31, 2015, trial balances for Price Company and Score Company were as follows Cash Accounts Receivable Note Receivable $108,800 $76,900 167,300 92,200 74,200 307,000 446,220 159,400 t in Score Company Plant and Equipment Land Dividends Declared Cost of Goods Sold Other Expenses 956,600 417,900 69,000 50,100 813,700 238,100 122,400 $3,355,520 $1,226,000 159,400 70,700 251,600 Total Debits Accounts Payable Notes Payable Common Stock Other Contributed Capital Retained Earnings, 1/1 Sales Dividend and Interest Income $130,900 $46,600 121,100 495,300 199,200 264,700 161,000 683,700 213,200 1,423,410 484,900 305,000 52,510 Total Credits $3,355,520 $1,226,000 Price Company's note receivable is receivable trom Score Company. Interest of $7,420 was paid by Score to Price during 2015. Any difference between book value and the value implied by the purchase price relates to goodwill Prepare a consolidated statements workpaper on December 31, 2015. (List items that increase retained earnings first.)

Explanation / Answer

Taking the wrong blanks one by one

1. The Revenue block the amount of dividend and interest income has not been removed $52510 this so the new amount will be $1908310

2. The interest amount $7420 has not been deducted will writing the Consolidated balance amount the new amount will be $366580

3. As the amount of Interest expense is considered the total cost and expenses will change by $ 7420

and the net income would change to $489930

4. In Retained earnings only 90% of the retained earnings will go in the credit column as it holds only 90% of the stocks. $213,200 x 90% = $191,880

5.Net income figures in last coulmn have to be written by adding the both incomes less reducing the debit and adding credit amount the non controlling interest will go in non controlling interest account

6. Dividend Declared = 70,700 has we are only preparing consolidated balance sheet of Price.

7. Dividend and interest income goes in the retained earnings of the Price consolidated financial and not added and subtracted from Investment in subsidiary

8. Notes Payable total has to be reduced by $74,200 as it is from Score only.

9. Please write the totals in last column you have correctly written in the other columns where it is appearing green.

Retained earnings will consist only 90% of the Score earnings other 10% will go in non controlling interest.

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