Palmer Corporation purchased 75% of Stone Industries' common stock on January 2, 2012. On January 1, 2013, Stone sold equipment to Palmer that had a net book value of $16,000 and an original cost of $24,000 for $20,000. On January 1, 2013, Palmer sold a building to Stone that had a net book value of $200,000 and an original cost of $250,000 for $300,000. The equipment had a remaining useful life of 8 years, and the building had a remaining useful life of 20 years. Neither asset had salvage value. Both companies use straight-line depreciation.
Selected account balances are shown below for Palmer and Stone for the year ended December 31, 2013:
Required:
1. Prepare the consolidating working paper entries relating to the equipment and building for the year ended December 31, 2013.
2. Calculate the following balances for the year ended December 31, 2013:
A. Consolidated "Other Expenses"
B. Consolidated Buildings
C. Consolidated Equipment
D. Noncontrolling interest in Stone's net income

Question

Palmer Corporation purchased 75% of Stone Industries' common stock on January 2, 2012. On January 1, 2013, Stone sold equipment to Palmer that had a net book value of $16,000 and an original cost of $24,000 for $20,000. On January 1, 2013, Palmer sold a building to Stone that had a net book value of $200,000 and an original cost of $250,000 for $300,000. The equipment had a remaining useful life of 8 years, and the building had a remaining useful life of 20 years. Neither asset had salvage value. Both companies use straight-line depreciation.
Selected account balances are shown below for Palmer and Stone for the year ended December 31, 2013:
  Required:
1. Prepare the consolidating working paper entries relating to the equipment and building for the year ended December 31, 2013.
2. Calculate the following balances for the year ended December 31, 2013:
A. Consolidated "Other Expenses"
B. Consolidated Buildings
C. Consolidated Equipment
D. Noncontrolling interest in Stone's net income

Quizplus · Accepted Answer

The Answer of Palmer Corporation purchased 75% of Stone Industries' common stock on January 2, 2012. On January 1, 2013, Stone sold equipment to Palmer that had a net book value of $16,000 and an original cost of $24,000 for $20,000. On January 1, 2013, Palmer sold a building to Stone that had a net book value of $200,000 and an original cost of $250,000 for $300,000. The equipment had a remaining useful life of 8 years, and the building had a remaining useful life of 20 years. Neither asset had salvage value. Both companies use straight-line depreciation.
Selected account balances are shown below for Palmer and Stone for the year ended December 31, 2013:
  Required:
1. Prepare the consolidating working paper entries relating to the equipment and building for the year ended December 31, 2013.
2. Calculate the following balances for the year ended December 31, 2013:
A. Consolidated "Other Expenses"
B. Consolidated Buildings
C. Consolidated Equipment
D. Noncontrolling interest in Stone's net income

Palmer Corporation Purchased 75% of Stone Industries' Common Stock on January