Public Corporation acquired 90 percent of Station Company's voting common stock on January 1, 20X1, for $504,900. At the time ofthe combination, Station reported common stock outstanding of $127,000 and retained earnings of $384,000, and the fair value of thenoncontrolling interest was $56,100. The book value of Station's net assets approximated market value except for patents that had amarket value of $50,000 more than their book value. The patents had a remaining economic life of five years at the date of thebusiness combination. Station reported net income of $70,000 and paid dividends of $23,000 during 20X1.Required:a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method inaccounting for its investment?Balance in investment accountb. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.view transaction listConsolidationWorksheet EntriesAEvent1BCRecord the basic consolidation entry.Note: Enter debits before credits.$ 531,300Record entryAccountsCommon stockRetained earningsIncome from Station CompanyNCI in Net Income of Station CompanyInvestment in Station CompanyDividends declaredNCI in Net assets of Station CompanyClear entryDebit127,000384,0007,000Creditview consolidation entries

Consolidated financial statements are those statements that are prepared to present the assets,…

Required: a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method accounting for its investment? Balance in investment account $ 531,300 b. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

Required: a. What balance did Public report as its investment in Station at December 31, 20X1, assuming Public uses the equity method accounting for its investment? Balance in investment account $ 531,300 b. Prepare the consolidation entry or entries needed to prepare consolidated financial statements at December 31, 20X1. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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