On January 1, 2014, Wrobel Company acquired a 90 percent interest in Sally Company for $270,000. On January 1, 2014, Sally's total stockholders' equity was $300,000
The fair value and book value of Sally's individual assets and liabilities were equal.
n January 2, 2014, Sally Company acquired a 10 percent interest in Wrobel Company for $70,000. On January 2, 2014, Wrobel's total stockholders' equity was $700,000. The fair value and book value of Wrobel's individual assets and liabilities were equal.
For the year ending December 31, 2014, the following data is available:
Net income Dividends
Wrobel Company $50,000 $0
Sally Company $30,000 $0
The treasury stock method is used to account for the mutual stock holdings between Wrobel and Sally. The separate net incomes do not include investment income.
Required:
1. What is Sally's income from Wrobel for 2014?
2. What is Wrobel's income from Sally for 2014?
3. What is the noncontrolling interest share associated with Sally Company for 2014?
4. Prepare the elimination entry for Sally's Investment in Wrobel Company.
Requirement 1
No income from Wrobel because Sally uses the cost method for the Investment in Wrobel and dividends are $0 in 2014.
Requirement 2
$30,000 × 90% = $27,000
Requirement 3
$30,000 × 10% = $3,000
Requirement 4
Treasury stock 70,000
Investment in Wrobel Co. 70,000
You might also like to view...
Maridings Inc., an apparel manufacturer, employed a large-scale recruitment drive to hire some of the country's best fashion designers. The company's HR team was responsible for measuring the success of this recruitment drive to quantify its returns. In this scenario, the HR team can use a process is referred to as _____.
A. HR report B. HR audit C. HR analytics D. HR statistics E. HR scoping
Everyone in the Tagi tribe agreed to vote out Gervasse at the next tribal council. Their 39-day project to make it to the final four together was two steps away from completion. This project group is in the:
A) Storming stage of group development. B) Performing stage of group development. C) Forming stage of group development. D) Norming stage of group development.