Based on the information, what amount will be reported in the consolidated finan
ID: 2581059 • Letter: B
Question
Based on the information, what amount will be reported in the consolidated financial statements prepared December 31, 20X4? What about if total assets will be reported on the balance sheet?The following data applies to Questions 7-11: On January 1, 20x4, Plimsol Company acquired 100 percent of Shipping Corporation's voting shares, at underlying book value. Plimsol uses the cost method in accounting for its investment in Shipping. Shipping's retained earnings was $75,000 on the date of acquisition. On December 31, 20X4, the trial balance data for the two companies are as follows: Plimsol Co Item Current Assets Depreciable Assets (net) Investment in Shipping Corp Other Expenses Depreciation Expense Dividends Declared Current Liabilities Long-Term Debt Common Stock Retained Earnings Sales Dividend Income Debit Credit Credit Debit $ 75,000 150,000 $100,000 200,000 125,000 60,000 20,000 25,000 45,000 15,000 15,000 $ 40,000 75,000 100,000 150,000 150,000 5,000 $25,000 50,000 50,000 75,000 100,000 $530,000$530000 $300,000 $300.000
Explanation / Answer
Plimsol Company and Shipping Corporation Consolidation Workpaper December 31, 20x4 Item Plimsol Shipping Eliminations Consolidated Company Corp. Debit Credit Sales 150,000 100,000 250,000 Dividend Income 15,000 (1) 15,000 - Credits 165,000 100,000 250,000 Depreciation Expease 20,000 15,000 35,000 Other Expenses 60,000 45,000 105,000 Debits (80,000) (60,000) (140,000) Income, carry forward 85,000 40,000 15,000 110,000 Ret. Earnings, Jan. 1 150,000 75,000 (2) 75,000 150,000 Income, from above 85,000 40,000 15,000 110,000 235,000 115,000 260,000 Dividends Declared (25,000) (15,000) (1) 15,000 (25,000) Ret. Earnings, Dec. 31, carry forward 210,000 100,000 90,000 15,000 235,000 Current Assets 100,000 75,000 175,000 Deprec. Assets (net) 200,000 150,000 350,000 Investment in Shipping Corporation Stock 125,000 (2) 125,000 - Debits 425,000 225,000 525,000 Current Liabilities 40,000 25,000 65,000 Long-Term Debt 75,000 50,000 125,000 Common Stock Plimsol Company 100,000 100,000 Shipping Corporation 50,000 (2) 50,000 - Retained Earnings, from above 210,000 100,000 90,000 15,000 235,000 Credits 425,000 225,000 140,000 140,000 525,000
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