Patel Company purchased all the outstanding ordinary shares of Singh Company on December 31, 2011. Just before the purchase, the condensed statements of financial position of the two companies were as follows.Patel used current assets of $710.000 to acquire the shares of Singh. The excess of this purchase price over the book value of Patel’s net assets is determined to be attributable $20,000 to Singh’s plant and equipment and the remainder to goodwill.
(a) Prepare the entry for Patel Company’s acquisition of Singh Company shares.
(b) Prepare a consolidated worksheet at December 31.2011.
(c) Prepare a consolidated statement of financial position at December 31.2011.
Penn Corporation purchased for $300,000 a 25% interest in Teller, Inc. This investment enables Penn to exert significant influence over Teller. During the year Teller earned net income of $180,000 and paid dividends of $60,000.
Prepare Penn’s journal entries related to this investment.
Player Corporation makes an equity investment costing $73,000 and classifies it as non-trading. At December 31, the fair value of the investment is $67,000.InstructionsPrepare the adjusting entry to report the investments properly.
Indicate the statement presentation of the accounts in your entry.
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