On January 1, 2008, Orion Company acquired 70 percent of Simplex Company's stock at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 30 percent of the book value of Simplex Company. On December 31, 2009, Simplex acquired 15 percent of Orion's stock. Balance sheets for the two companies on December 31, 2009, are as follows:

Required:
Assuming that the treasury stock method is used in reporting Orion's shares held by Simplex, prepare the elimination entries and a consolidated balance sheet worksheet for December 31, 2009.

Question

On January 1, 2008, Orion Company acquired 70 percent of Simplex Company's stock at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 30 percent of the book value of Simplex Company. On December 31, 2009, Simplex acquired 15 percent of Orion's stock. Balance sheets for the two companies on December 31, 2009, are as follows:  
  
Required:
Assuming that the treasury stock method is used in reporting Orion's shares held by Simplex, prepare the elimination entries and a consolidated balance sheet worksheet for December 31, 2009.

Quizplus · Accepted Answer

The Answer of On January 1, 2008, Orion Company acquired 70 percent of Simplex Company's stock at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 30 percent of the book value of Simplex Company. On December 31, 2009, Simplex acquired 15 percent of Orion's stock. Balance sheets for the two companies on December 31, 2009, are as follows:  
  
Required:
Assuming that the treasury stock method is used in reporting Orion's shares held by Simplex, prepare the elimination entries and a consolidated balance sheet worksheet for December 31, 2009.

On January 1, 2008, Orion Company Acquired 70 Percent of Simplex