On January 1, 2021, Vacker Co. acquired 70% of Carper Inc. by paying $630,000. Carper reported common stock on that date of $420,000 with retained earnings of $252,000. A building was undervalued in the company's financial records by $28,000. This building had a ten-year remaining life. Copyrights of $80,000 were to be recognized and amortized over 20 years. Carper earned income and paid cash dividends as follows: 2021 2022 2023 Net Income $105,000 $134,400 $154,000 Dividends Paid $54,600 $61,600 $84,000 On December 31, 2023, Vacker owes $30,800 to Carper. There have been no changes in Carper's common stock account since the acquisition. Required: If the equity method has been applied by Vacker for this acquisition, what are the consolidation entries needed as of December 31, 2023?
On January 1, 2021, Vacker Co. acquired 70% of Carper Inc. by paying $630,000. Carper reported common stock on that date of $420,000 with retained earnings of $252,000. A building was undervalued in the company's financial records by $28,000. This building had a ten-year remaining life. Copyrights of $80,000 were to be recognized and amortized over 20 years. Carper earned income and paid cash dividends as follows: 2021 2022 2023 Net Income $105,000 $134,400 $154,000 Dividends Paid $54,600 $61,600 $84,000 On December 31, 2023, Vacker owes $30,800 to Carper. There have been no changes in Carper's common stock account since the acquisition. Required: If the equity method has been applied by Vacker for this acquisition, what are the consolidation entries needed as of December 31, 2023?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...
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Transcribed Image Text:On January 1, 2021, Vacker Co. acquired 70% of Carper Inc. by paying $630,000.
Carper reported common stock on that date of $420,000 with retained earnings of
$252,000. A building was undervalued in the company's financial records by $28,000.
This building had a ten-year remaining life. Copyrights of $80,000 were to be recognized
and amortized over 20 years.
Carper earned income and paid cash dividends as follows:
2021
2022
2023
Net
Income
$105,000
$134,400
$154,000
Dividends
Paid
$54,600
$61,600
$84,000
On December 31, 2023, Vacker owes $30,800 to Carper. There have been no changes in
Carper's common stock account since the acquisition.
Required:
If the equity method has been applied by Vacker for this acquisition, what are the
consolidation entries needed as of December 31, 2023?
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