Here is my question, which is similar to Textbook Solution Chapter 9 - 21P Advan

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Here is my question, which is similar to Textbook Solution Chapter 9 - 21P Advanced Accounting 10e (Christensen, Cottrell, Budd):

Presley Pools Inc. acquired 60 percent of the common stock of Jacobs Jacuzzi Company on December 31, 20X6, for $2,260,000. At that date, the fair value of the noncontrolling interest was $1,660,000. The full amount of the differential was assigned to goodwill. On December 31, 20X7, Presley Pools management reviewed the amount attributed to goodwill and concluded an impairment loss of $24,000 should be recognized in 20X7. On January 2, 20X7, Presley purchased 20 percent of the outstanding preferred shares of Jacobs for $54,600.

      In its 20X6 annual report, Jacobs reported the following stockholders' equity balances at the end of the year:

The preferred stock is cumulative and has a liquidation value equal to its call price of $106 per share. Because of cash flow problems, Jacobs declared no dividends during 20X6, the first time it had missed a preferred dividend. With the improvement in operations during 20X7, Jacobs declared the current stated preferred dividend as well as preferred dividends in arrears; Jacobs also declared a common dividend for 20X7 of $25,000. Jacobs’ reported net income for 20X7 was $300,000.

I am stuck on 2-items of G-1, the Additional Paid-in Capital and Investment in Jacobs Jacuzzi CS. If I can at least figure out one of them, I can back into the other. Any help on either of the missing numbers would be appreciated!

I tried for Investment in Jacobs Jacuzzi CS: Used answer to b, which is $1,677,840 + [(300,000-26,000) X 60%] - (25,000 X .60%) = $1,827,240 but was wrong when I checked my work. This worked for figuring out solution 9-21.

Prepare all consolidation entries that should appear in a worksheet to prepare a complete set of 20X7 consolidated financial statements for Presley Pools and its subsidiary. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the basic consolidation entry.:

      In its 20X6 annual report, Jacobs reported the following stockholders' equity balances at the end of the year:

Explanation / Answer

Answer: Investment in 60 percent of the common stock of Jacobs Jacuzzi Company = 60% of 510,000 = $ 306,000 for $ 2,260,000 when the fair value of remaining 40% shares was $ 1,660,000. Therefore, the investment resulted in a purchase of 60% shares with fair value $ 1,660,000 x 60 / 40 = $ 2,490,000 for $ 2,260,000 which result in additional paid in capital of $ 2,260,000 - $ 306,000 = $ 1,954,000.

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