On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The balance sheet of Price Company and the consolidated balance sheet on December 3, 2013, were as follows: Price Company Consolidated Cash $22,540 $35,317 Accounts receivable 38,040 62,400 Inventory 133,050 162,587 Investment in Shipley Company 224,370 —0— Plant and equipment (net) 195,000 357,060 Land 110,690 222,203 Total $723,690 $839,567 Accounts payable $38,960 $112,100 Note payable 99,300 99,300 Noncontrolling interest in Shipley Company —0— 42,737 Common stock 279,500 279,500 Other contributed capital 150,100 150,100 Retained earnings 155,830 155,830 Total $723,690 $839,567 On the date of acquisition, the stockholders’ equity section of Shipley Company’s balance sheet was as follows: Common stock $83,180 Other contributed capital 85,660 Retained earnings 53,220 Total $222,060 (a) Your answer is correct. Prepare the investment elimination entry made to complete a consolidated balance sheet workpaper. Any difference between book value and the value implied by the purchase price relates to subsidiary land. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (b) Prepare Shipley Company’s balance sheet as it appeared on December 31, 2013. (List assets in order of liquidity.) SHIPLEY COMPANY Balance Sheet December 31, 2013For the Year Ended December 31, 2013For the Quarter Ended December 31, 2013 Assets $ Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity $ Liabilities and Stockholders' Equity $ Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity

On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The balance sheet of Price Company and the consolidated balance sheet on December 3, 2013, were as follows: Price Company Consolidated Cash $22,540 $35,317 Accounts receivable 38,040 62,400 Inventory 133,050 162,587 Investment in Shipley Company 224,370 —0— Plant and equipment (net) 195,000 357,060 Land 110,690 222,203 Total $723,690 $839,567 Accounts payable $38,960 $112,100 Note payable 99,300 99,300 Noncontrolling interest in Shipley Company —0— 42,737 Common stock 279,500 279,500 Other contributed capital 150,100 150,100 Retained earnings 155,830 155,830 Total $723,690 $839,567 On the date of acquisition, the stockholders’ equity section of Shipley Company’s balance sheet was as follows: Common stock $83,180 Other contributed capital 85,660 Retained earnings 53,220 Total $222,060 (a) Your answer is correct. Prepare the investment elimination entry made to complete a consolidated balance sheet workpaper. Any difference between book value and the value implied by the purchase price relates to subsidiary land. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (b) Prepare Shipley Company’s balance sheet as it appeared on December 31, 2013. (List assets in order of liquidity.) SHIPLEY COMPANY Balance Sheet December 31, 2013For the Year Ended December 31, 2013For the Quarter Ended December 31, 2013 Assets $ Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity $ Liabilities and Stockholders' Equity $ Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter16: Advanced Topics Concerning Complex Auditing Judgments

Section: Chapter Questions

Problem 55RSCQ

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(a)


	Your answer is correct.

Prepare the investment elimination entry made to complete a consolidated balance sheet workpaper. Any difference between book value and the value implied by the purchase price relates to subsidiary land. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

(b)

Prepare Shipley Company’s balance sheet as it appeared on December 31, 2013. (List assets in order of liquidity.)

SHIPLEY COMPANY Balance Sheet December 31, 2013For the Year Ended December 31, 2013For the Quarter Ended December 31, 2013
Assets
			$




Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity			$
Liabilities and Stockholders' Equity
			$



Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity			$

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