The summarized balance sheet of Separate Company on January 1, 20X3, contained t

Question

The summarized balance sheet of Separate Company on January 1, 20X3, contained the following amounts:

On January 1, 20X3, Joint Corporation acquired 80 percent of the common shares and 70 percent of the preferred shares of Separate Company at underlying book value. At that date, the fair value of the noncontrolling interest in Separate’s common stock was equal to 20 percent of the book value of its common stock.

Prepare the worksheet consolidation entries needed to prepare a consolidated balance sheet immediately following Joint’s purchase of shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

The summarized balance sheet of Separate Company on January 1, 20X3, contained the following amounts:

Explanation / Answer

Worsheet consolidation entry would be:

Debit Preferred stock $ 135000
Debit common stock $ 150000
Debit retained earnings $ 180000
Credit investments in separate Common Stock $ 184000
Credit Investment in Separate Preferred Stock $ 94500
Credit NCI in NA of Separate $ 186500

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