On January 1, 2020, Barber Corp. paid $1,160,000 to acquire Thompson Co. Thompson maintained separate incorporation. Barber used the equity method to account for the investment. The following information is available for Thompson’s assets, liabilities, and stockholders' equity accounts on January 1, 2020:        Book Value    Fair Value Current assets    $    130,000         $    130,000      Land         75,000              193,000      Building (twenty year life)         250,000              276,000      Equipment (ten year life)         540,000              518,000      Current liabilities         26,000              26,000      Long-term liabilities         124,000              124,000      Common stock         233,000                     Additional paid-in capital         389,000                     Retained earnings         223,000                         Thompson earned net income for 2020 of $134,000 and paid dividends of $51,000 during the year. At the end of 2023 the consolidation entry to eliminate barber's accrual of thompson's earnings would include a credit to investment in thompson company for

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 1, 2020, Barber Corp. paid $1,160,000 to acquire Thompson Co. Thompson maintained separate incorporation. Barber used the equity method to account for the investment. The following information is available for Thompson’s assets, liabilities, and stockholders' equity accounts on January 1, 2020:

 

     Book
Value    Fair
Value
Current assets    $    130,000         $    130,000     
Land         75,000              193,000     
Building (twenty year life)         250,000              276,000     
Equipment (ten year life)         540,000              518,000     
Current liabilities         26,000              26,000     
Long-term liabilities         124,000              124,000     
Common stock         233,000                    
Additional paid-in capital         389,000                    
Retained earnings         223,000                    
 
 

Thompson earned net income for 2020 of $134,000 and paid dividends of $51,000 during the year. At the end of 2023 the consolidation entry to eliminate barber's accrual of thompson's earnings would include a credit to investment in thompson company for

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