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.
On 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:
$$\begin{array} { l c c }
& \text { Netincome } & \text { Dividends } \
\text { Wrobel Company } & \$ 50,000 & \$ 0 & \
\text { Sally Company } & \$ 30,000 & \$ 0
\end{array}$$ 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.
A partial working paper is available for the year ending December 31,2014.
Required:
Prepare the elimination entries for the year ending December 31,2014.
Do not enter them onto the worksheet.Instead,list them below.

Question

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.
On 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:
 $$\begin{array} { l c c } 
& \text { Netincome } &  \text { Dividends } \
\text { Wrobel Company } & \$ 50,000 & \$ 0 & \
\text { Sally Company } & \$ 30,000 & \$ 0
\end{array}$$ 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.
A partial working paper is available for the year ending December 31,2014.
  Required:
Prepare the elimination entries for the year ending December 31,2014.
Do not enter them onto the worksheet.Instead,list them below.

Quizplus · Accepted Answer

The Answer of 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.
On 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:
 $$\begin{array} { l c c } 
& \text { Netincome } &  \text { Dividends } \
\text { Wrobel Company } & \$ 50,000 & \$ 0 & \
\text { Sally Company } & \$ 30,000 & \$ 0
\end{array}$$ 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.
A partial working paper is available for the year ending December 31,2014.
  Required:
Prepare the elimination entries for the year ending December 31,2014.
Do not enter them onto the worksheet.Instead,list them below.

On January 1,2014,Wrobel Company Acquired a 90 Percent Interest in Sally