Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fa value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common stock for $97,000. 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 20X7 $ 49,000 51,000 72,000 370,000 $542,000 $ 77,000 105,000 155,000 205,000 $542,000 Balance in investment account December 31 20X8 $ 79,000 91,000 102,000 350,000 $622,000 $127,000 105,000 155,000 235,000 $622,000 20X9 $ 99,000 121,000 162,000 330,000 $712,000 $167,000 105,000 155,000 285,000 $712,000 Split paid dividends of $22,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and amortizes all differentials over 10 years against the related investment income. All differentials are assigned to patents in the consolidated financial statements. Required: a. Compute the balance in Peel's Investment in Split Products Company Stock account on December 31, 20X8.
Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fa value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common stock for $97,000. 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 20X7 $ 49,000 51,000 72,000 370,000 $542,000 $ 77,000 105,000 155,000 205,000 $542,000 Balance in investment account December 31 20X8 $ 79,000 91,000 102,000 350,000 $622,000 $127,000 105,000 155,000 235,000 $622,000 20X9 $ 99,000 121,000 162,000 330,000 $712,000 $167,000 105,000 155,000 285,000 $712,000 Split paid dividends of $22,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and amortizes all differentials over 10 years against the related investment income. All differentials are assigned to patents in the consolidated financial statements. Required: a. Compute the balance in Peel's Investment in Split Products Company Stock account on December 31, 20X8.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:b. Compute the balance in Peel's Investment in Split Products Company Stock account on December 31, 20X9.
Balance in investment account
c. Prepare the consolidation entries needed as of December 31, 20X9, to complete a three-part consolidation worksheet. (If no entry
is required for a transaction/event, select "No journal entry required" in the first account field.)
view transaction list
Consolidation
Worksheet Entries
A
B C
Record the basic consolidation entry.
Note: Enter debits before credits.
Event
1
Accounts
Debit
Credit
>
Transcribed Image Text:Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fair
value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common
stock for $97,000. 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
20X7
$ 49,000
51,000
72,000
370,000
$542,000
December 31
20X8
Balance in investment account
$ 79,000
91,000
102,000
350,000
$622,000
20X9
$ 99,000
121,000
162,000
330,000
$712,000
$ 77,000 $127,000 $167,000
105,000
105,000
105,000
155,000
155,000
155,000
205,000
235,000
285,000
$542,000
$622,000
$712,000
Split paid dividends of $22,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and
amortizes all differentials over 10 years against the related investment income. All differentials are assigned to patents in the
consolidated financial statements.
Required:
a. Compute the balance in Peel's Investment in Split Products Company Stock account on December 31, 20X8.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education