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EXERCISE 4-5 Eliminating Entries, Non-controlling
Interest LO 2
On January 1, 2014, Plate Company purchased a 90% interest in the
common stock of Set Company for $650,000, an amount $20,000 in
excess of the book value of equity acquired. The excess relates to the
understatement of Set Company's land holdings.
Excerpts from the consolidated retained earnings section of the
consolidated statements workpaper for the year ended December 31,
2014, follow:
Set Company
1/1/14 retained
190,000
earnings
Net income from above 132,000
Dividends declared
(50,000)
12/31/14 retained
earnings to the balance 272,000
sheet
Consolidated Balances
880,000
420,000
(88,000)
1,212,000
Set Company's stockholders' equity is composed of common stock and
retained earnings only.
Required: