On January 1, 20X7, Plimsol Company acquired 100 percent of Shipping Corporation's voting shares, at underlying book value. Plimsol uses the cost method in accounting for its investment in Shipping. Shipping's reported retained earnings of $75,000 on the date of acquisition. The trial balances for Plimsol Company and Shipping Corporation as of December 31, 20X8, follow: Required:
1) Provide all eliminating entries required to prepare a full set of consolidated statements for 20X8.
2) Prepare a three-part consolidation worksheet in good form as of December 31, 20X8.

Question

On January 1, 20X7, Plimsol Company acquired 100 percent of Shipping Corporation's voting shares, at underlying book value. Plimsol uses the cost method in accounting for its investment in Shipping. Shipping's reported retained earnings of $75,000 on the date of acquisition. The trial balances for Plimsol Company and Shipping Corporation as of December 31, 20X8, follow:  Required:
1) Provide all eliminating entries required to prepare a full set of consolidated statements for 20X8.
2) Prepare a three-part consolidation worksheet in good form as of December 31, 20X8.

Quizplus · Accepted Answer

The Answer of On January 1, 20X7, Plimsol Company acquired 100 percent of Shipping Corporation's voting shares, at underlying book value. Plimsol uses the cost method in accounting for its investment in Shipping. Shipping's reported retained earnings of $75,000 on the date of acquisition. The trial balances for Plimsol Company and Shipping Corporation as of December 31, 20X8, follow:  Required:
1) Provide all eliminating entries required to prepare a full set of consolidated statements for 20X8.
2) Prepare a three-part consolidation worksheet in good form as of December 31, 20X8.

On January 1, 20X7, Plimsol Company Acquired 100 Percent of Shipping