Palmer Corporation purchased 75% of Stone Industries' common stock on January 2, 2010.On January 1, 2011, 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, 2011, 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, 2011:
Required:
1.Prepare the consolidating working paper entries relating to the equipment and building for the year ended December 31, 2011.
2.Calculate the following balances for the year ended December 31, 2011:
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, 2010.On January 1, 2011, 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, 2011, 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, 2011:
  Required:
1.Prepare the consolidating working paper entries relating to the equipment and building for the year ended December 31, 2011.
2.Calculate the following balances for the year ended December 31, 2011:
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, 2010.On January 1, 2011, 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, 2011, 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, 2011:
  Required:
1.Prepare the consolidating working paper entries relating to the equipment and building for the year ended December 31, 2011.
2.Calculate the following balances for the year ended December 31, 2011:
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