Question: Pirate Corporation acquired 60 percent ownership of
Pirate Corporation acquired 60 percent ownership of Ship Company on January 1, 20X8, at underlying book value. At that date, the fair value of the non controlling interest was equal to 40 percent of the book value of Ship Company. Accumulated depreciation on buildings and equipment was $75,000 on the acquisition date. Trial balance data at December 31, 20X8, for Pirate and Ship are as follows:
Additional Information:
Ship purchased stock of Row Company on January 1, 20X8, for $30,000 and classified the investment as available-for-sale securities. The value of Row’s securities increased to $40,000 at December 31, 20X8.
Required:
a. Give all consolidation entries needed to prepare a three-part consolidation worksheet as of December 31, 20X8.
b. Prepare a three-part consolidation worksheet for 20X8 in good form.
c. Prepare a consolidated balance sheet, income statement, and statement of comprehensive income for 20X8.
Transcribed Image Text:
Pirate Corporation Ship Company Item Debit Credit Debit Credit $ 27,000 65,000 $ 8,000 Cash Accounts Receivable 22,000 Inventory Buildings & Equipment Investment in Row Company Securities Investment in Ship Company 40,000 30,000 235,000 40,000 500,000 108,000 150,000 30,000 Cost of Goods Sold 110,000 10,000 Depreciation Expense Interest Expense 8,000 24,000 3,000 15,000 Dividends Declared $ 85,000 20,000 $140,000 Accumulated Depreciation Accounts Payable Bonds Payable 63,000 100,000 200,000 50,000 100,000 Common Stock Retained Earnings Other Comprehensive Income from Ship Co.(OCI)-Unrealized Gain on Investments 208,000 6,000 60,000 Unrealized Gain on Investments (OCI) 10,000 148,000 220,000 15,000 Sales Income from Ship Company $952,000 eyeBeam $952,000 $473,000 $473,000
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