4.On January 1, 2023, Pantop Corporation acquired 85% of the outstanding common stock of SongCompany for $578,000. There was no control premium.The following information about Song Company on January 1, 2023 was available:Book valueFair valueCashInventoryBuildingTotalAccounts PayableCommon StockAdd. Paid-in CapitalRetained EarningsTotal193,00040,000180,000413,0003,000200,000110,000100,000413,000193,00039,400200,000432,4003,000Pantop uses the complete equity method to account for its investment in Song. During 2023, Songhad a net income of $72,000. The remaining useful life of the building was five years with nosalvage value. Song uses straight line depreciation. Song's cost of goods sold (FIFO) was$50,000 in 2023. On December 23, 2023, Song declared and paid $48,000 cash dividend to itsshareholders. Goodwill was unimpaired as of December 31, 2023.(i) Prepare journal entries for Pantop to record under the complete equity method of accountingthe operating results of Song in 2023.(ii) Prepare the working paper eliminating entries C, E, R, O and N (in journal entry format) forPantop Corporation and subsidiary for the year ended December 31, 2023.

Consolidation is an activity in which financial statements of a parent and its subsidiary should be…

On January 1, 2023, Pantop Corporation acquired 85% of the outstanding common stock of Song Company for $578,000. There was no control premium. The following information about Song Company on January 1, 2023 was available: Book value Fair value Cash Inventory Building Total Accounts Payable Common Stock 193,000 40,000 180,000 413,000 3,000 200,000 193,000 39,400 200,000 432,400 3,000

On January 1, 2023, Pantop Corporation acquired 85% of the outstanding common stock of Song Company for $578,000. There was no control premium. The following information about Song Company on January 1, 2023 was available: Book value Fair value Cash Inventory Building Total Accounts Payable Common Stock 193,000 40,000 180,000 413,000 3,000 200,000 193,000 39,400 200,000 432,400 3,000

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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