Plate Corporation acquired 75 percent of the stock of Silver Company on January 1,20X7,for $225,000.At that date,the fair value of the noncontrolling interest was $75,000.Silver's balance sheet contained the following amounts at the time of the combination:
During each of the next three years,Silver reported net income of $30,000 and paid dividends of $10,000.On January 1,20X9,Plate sold 1,500 shares of Silver's $10 par value shares for $60,000 in cash.Plate used the fully adjusted equity method in accounting for its ownership of Silver Company.
-Based on the preceding information,in the journal entry recorded by Plate for sale of shares:

Question

Plate Corporation acquired 75 percent of the stock of Silver Company on January 1,20X7,for $225,000.At that date,the fair value of the noncontrolling interest was $75,000.Silver's balance sheet contained the following amounts at the time of the combination:
  During each of the next three years,Silver reported net income of $30,000 and paid dividends of $10,000.On January 1,20X9,Plate sold 1,500 shares of Silver's $10 par value shares for $60,000 in cash.Plate used the fully adjusted equity method in accounting for its ownership of Silver Company.
-Based on the preceding information,in the journal entry recorded by Plate for sale of shares:

Quizplus · Accepted Answer

The investment in Silver Stock is credited for $51,000, which represents the cost of the shares sold.

Plate Corporation Acquired 75 Percent of the Stock of Silver