Question

The summarized balance sheet of Separate Company on January 1, 20X3, contained the following amounts:

Total Assets	$	405,000	Total Liabilities	$	50,000
			Preferred Stock		105,000
			Common Stock		90,000
			Retained Earnings		160,000
Total Assets	$	405,000	Total Liabilities and Equities	$	405,000

On January 1, 20X3, Joint Corporation acquired 80 percent of the common shares and 70 percent of the preferred shares of Separate Company at underlying book value. At that date, the fair value of the noncontrolling interest in Separate’s common stock was equal to 20 percent of the book value of its common stock.

Required:

Prepare the worksheet consolidation entries needed to prepare a consolidated balance sheet immediately following Joint’s purchase of shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Record the basic consolidation entry.

Answer 1