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Advanced Accounting Chapter 6 Exercise 6-4 Controlling

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Advanced Accounting Chapter 6

Exercise 6-4
Controlling Interest, Downstream Sales

On Jan. 1, 2011, Pearce Co. purchased an 80% interest in the capital stock of Searl Co. for $2,460,000. At that time, Searl Co. had capital stock of $1,500,000 and retained earnings of $300,000. The diffeerence between book of value Searl equity and the value implied by the price was attributed to specific assets of Searl Co. as follows:

At year end 2011 and 2012, Searl had in its inventory merchandise that it had purchased from Pearce at a 25% markup on cost during each year in the following amounts:

2011 $90,000
2012 $105,000

Calculate the controlling interest in consolidated net income for 2011 and 2012


6-5

Refer to 6-4.
Using the same figures, assume that the merchandise mentioned was included in Pearce's inventory, having been purchased from Searl.

Calculate the controlling interest in consolidated net income for 2011 and 2012.


Problem 6-16
Complete Equity with Downstream Sales

Pruitt Corp. owns 90% of the common stock of Sedbrook Co. The stock was purchased for $540,000 on Jan. 1, 2009, when Sedbrook Co's retained earnings were $100,000. Preclosing trial balances for the two companies at Dec. 31, 2013, are presented here:

Required

A. Prepare the consolidated statements workpaper for the year ended Dec. 31, 2013.

B. Calculate consolidated retained earnings on Dec. 31, 2013, using the analytical or t-account approach.


Problem 6-17
Complete Equity with Upstream Sales

Paque Corp. owns 90% of the common stock of Segal Co. The stock was purchased for $810,000 on Jan. 1, 2009, when Segal Co's retained earnings were $150,000

Financial data for 2013 are presented here:

Required:

A. Prepare the consolidated statements workpaper for the year ended Dec. 31, 2011.

B. Calculate consolidated retained earnings on Dec. 31, 2011, using the analytical or t-account approach.


Thanks in advance

Would like to have by April 2 or 3
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