FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:Polka Corporation acquired 100 percent of Song Company's voting stock on January 1, 20X4, at underlying book value.
Polka uses the equity method in accounting for its ownership of Song. On December 31, 20X4, the trial balances of the two
companies are as follows:
Item
Current Assets
Depreciable Assets
Investment in Song Company
Depreciation Expense
Other Expenses
Dividends Declared
Accumulated Depreciation
Current Liabilities
Long-Term Debt
Common Stock
Retained Earnings
Sales
Income from Song Company
Polka Corporation
Debit
$ 254,000
514,000
246,000
20,000
156,000
69,000
Credit
Song Company
Debit
$ 156,000
308,000
10,000
81,000
30,000
Credit
$ 60,000
40,000
118,000
84,000
142,000
141,000
$ 186,000
60,000
98,000
186,000
463,000
216,000
50,000
$ 1,259,000 $ 1,259,000 $ 585,000 $ 585,000
Required:
a. Prepare all consolidation entries required on December 31, 20X4, to prepare consolidated financial statements.
b. Prepare a three-part consolidation worksheet as of December 31, 20X4.
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