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Steven, M.Acc.
Steven, M.Acc., Instructor
Category: Homework
Satisfied Customers: 756
Experience:  Instructor and accountant. Master's degree in Accounting.
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On January 1, 2009, Pert Company purchased 85% of the outstanding

Customer Question

On January 1, 2009, Pert Company purchased 85% of the outstanding common stock of Sales
Company for $350,000. On that date, Sales Company’s stockholders’ equity consisted of common
stock, $100,000; other contributed capital, $40,000; and retained earnings, $140,000.
Pert Company paid more than the book value of net assets acquired because the recorded
cost of Sales Company’s land was significantly less than its fair value.
During 2009 Sales Company earned $148,000 and declared and paid a $50,000
dividend. Pert Company used the partial equity method to record its investment in Sales
Company.

Continue the situation and assume that during 2010 Sales Company earned
$190,000 and declared and paid a $50,000 dividend.
Required:
A. Prepare the investment-related entries on Pert Company’s books for 2010.
B. Prepare the workpaper eliminating entries for a workpaper on December 31, 2010.
Submitted: 4 years ago.
Category: Homework
Expert:  Steven, M.Acc. replied 4 years ago.
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