Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $210,000. At that date, the fair value of the noncontrolling interest was $140,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common stock for $96,000. Summarized balance sheets for Split on the dates indicated are as follows: Assets Cash Accounts Receivable Inventory Buildings & Equipment (net) Total Assets Liabilities & Equities Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities & Equities December 31 20x8 20x7 20x9 $90,000 $ 40,000 $70,000 50,000 90,000 120,000 70,000 100,000 160,000 340,000 320,000 300,000 $500,000 $580,000 $670,000 $ 50,000 $100,000 100,000 100,000 140,000 100,000 150,000 150,000 150,000 200,000 230,000 280,000 $500,000 $580,000 $670,000 Split paid dividends of $20,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and

Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $210,000. At that date, the fair value of the noncontrolling interest was $140,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common stock for $96,000. Summarized balance sheets for Split on the dates indicated are as follows: Assets Cash Accounts Receivable Inventory Buildings & Equipment (net) Total Assets Liabilities & Equities Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities & Equities December 31 20x8 20x7 20x9 $90,000 $ 40,000 $70,000 50,000 90,000 120,000 70,000 100,000 160,000 340,000 320,000 300,000 $500,000 $580,000 $670,000 $ 50,000 $100,000 100,000 100,000 140,000 100,000 150,000 150,000 150,000 200,000 230,000 280,000 $500,000 $580,000 $670,000 Split paid dividends of $20,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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