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I need help with an accounting problem it is exercise 5-11

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I need help with an accounting problem it is exercise 5-11 (workpaper entries for three years) lo6 Advanced accounting.

 I am required to 3. Assumed to use of the complete equity method.


The question is On January 1, 2010, Piper Company acquired 80% interest in Sand Company for $2,276,000. At that time the capital stock and retained earnings of Sand Company were $1,800,000 and $700,000, respectively. Differences between fair calue and the book value of the indengifiable assets of sand company were as follows:

                                                              Fair Value in Excess of Book value

Inventory                                                  45,000

Equipment (net)                                      50,000


The book values of all other assets and liabilities of Sand Company were equal to their fair values on january 1, 2010. The equipment had a remaining useful life of 8 years. Inventory accounted for on a FIFO basis. Sand Company's reported net income and declared dividends for 2010 through 2012 are shown here:

                                 2010            2011          2012

Net Income            100,000        150,000    80,000

Dividends                 20,000          30,000   15,000


Submitted: 5 years ago.
Category: Homework
Expert:  Neo replied 5 years ago.

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