Question - On January 1, 20X8, Vector Company acquired 70 percent of Scalar Company's ownership on for $112,000 cash. At that date, the fair value of the noncontrolling interest was $48,000. The book value of Scalar's net assets at acquisition was $125,000. The book values and fair values of Scalar's assets and liabilities were equal, except for buildings and equipment, which were worth $20,000 more than book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Vector concluded at December 31, 20X8, that goodwill from its acquisition of Scalar shares had been impaired and the correct carrying amount was $10,000. Goodwill and goodwill impairment were assigned proportionately to the controlling and non-controlling shareholders. No additional impairment occurred in 20X9.
Trial balance data for Vector and Scalar on December 31, 20X9, are as follows:
|
|
Vector Co.
|
Scalar Co.
|
|
Item
|
Debit
|
Credit
|
Debit
|
Credit
|
|
Cash
|
$ 108,000
|
|
$ 30,000
|
|
|
Accounts Receivable
|
60,000
|
|
25,000
|
|
|
Inventory
|
80,000
|
|
30,000
|
|
|
Land
|
150,000
|
|
50,000
|
|
|
Buildings and Equipment
|
300,000
|
|
150,000
|
|
|
Investment in Scalar Co.
|
133,000
|
|
|
|
|
Cost of Goods Sold
|
180,000
|
|
100,000
|
|
|
Wage Expense
|
50,000
|
|
34,000
|
|
|
Depreciation Expense
|
30,000
|
|
15,000
|
|
|
Interest Expense
|
25,000
|
|
6,000
|
|
|
Other Expenses
|
40,000
|
|
21,000
|
|
|
Dividends Declared
|
40,000
|
|
10,000
|
|
|
Accumulated Depreciation
|
|
$ 150,000
|
|
$ 36,000
|
|
Accounts Payable
|
|
90,000
|
|
26,000
|
|
Wages Payable
|
|
30,800
|
|
9,000
|
|
Notes Payable
|
|
180,000
|
|
50,000
|
|
Common Stock
|
|
150,000
|
|
100,000
|
|
Retained Earnings
|
|
179,800
|
|
50,000
|
|
Sales
|
|
400,000
|
|
200,000
|
|
Income from Scalar
|
|
15,400
|
|
|
|
$1,196,000
|
$1,196,000
|
$471,000
|
$471,000
|
Required:
1) Provide all journal entries needed at December 31, 20X0.
2) Provide all consolidating entries needed to prepare a three-part consolidation worksheet as of December 31, 20X9.
3) Prepare a three-part consolidation worksheet for 20X9 in good form.
Attachment:- Assignment.rar