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Palus Corporation acquired 90 percent of Stalus Company's voting stock on January 1, 2010. The price paid was $145,000.

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Question;Consolidation work and financial statements subsequent to;acquisition Background and Information Palus Corporation acquired 90 percent of;Stalus Company's voting stock on January 1, 2010. The price paid was $145,000.;The excess of costs over book value was $10,000, which should be attributed to;goodwill and must be amortized over 10 years. The fair value of the;non-controlling (minority) interest was equal to 10 percent of the book value;of Stalus at that date. Palus uses the equity method in accounting for its;ownership of Stalus during the year 2010. Income during the year was $30,000;for Stalus and the company also declared dividends of $10,000. On December 31;2010, the trial balances of the two companies are as follows: Palus Corporation;Stalus Corporation Item Debit Credit Debit Credit Current Assets $173,000;$105,000 Depreciable Assets 500,000 300,000 Investment in Stalus Company 163,000;Dividends Declared 10,000 Accumulated Depreciation 175,000 75,000 Current;Liabilities 171,000 115,000 Long-Term Debt 100,000 45,000 Common Stock 200,000;100,000 Retained Earnings 123,000 50,000 Sales 100,000 80,000 Expenses 60,000;50,000 Income from Subsidiary 27,000 $896,000 $896,000 $465,000 $465,000;Required A. Prepare all eliminating journal entries required as of December 31;2010, to prepare the consolidated worksheet. B. Prepare a condensed;consolidation worksheet showing the trial balance, eliminations and;adjustments, controlling retained earnings, controlling income statement, and;consolidated balance sheet. C. Prepare the formal consolidated balance sheet;income statement, and retained earnings statements as of December 31, 2010.

 

Paper#44182 | Written in 18-Jul-2015

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