Question

Trim Corporation acquired 100 percent of Round Corporation’s voting common stock on January 1, 20X2, for $400,000. At that date, the book values and fair values of Round’s assets and liabilities were equal. Round reported the following summarized balance sheet data:

Answer 1

Answer:

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Trim Corporation acquired 100 percent of Round Corporation’s voting common stock on January 1, 20X2, for $405,000. At that date, the book values and fair values of Round’s assets and liabilities were equal. Round reported the following summarized balance sheet data:

 

 Assets $ 715,000    Accounts Payable $ 102,000  

 Bonds Payable  208,000  

 Common Stock  120,000  

 Retained Earnings  285,000  

 Total $ 715,000    Total $ 715,000  

Round reported net income of $89,000 for 20X2 and paid dividends of $30,000.

Give the consolidation entries needed at December 31, 20X2, to prepare consolidated financial statements. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explanation:

I have prepared necessary journals with which consolidation accounts can be prepared.

Find in the necessary journals in the attached excel document.

Download xlsx