Bowen Corporation owns 70 percent of Roan Corporation’s voting common stock. On
ID: 2553279 • Letter: B
Question
Bowen Corporation owns 70 percent of Roan Corporation’s voting common stock. On March 12, 20X2, Roan sold land it had purchased for $140,000 to Bowen for $185,000. Bowen plans to build a new warehouse on the property in 20X3.
Required:
a. Prepare the worksheet consolidation entries to remove the effects of the intercompany sale of land in preparing the consolidated financial statements at December 31, 20X2 and 20X3.
b. Prepare the worksheet consolidation entries needed at December 31, 20X3 and 20X4, if Bowen had initially purchased the land for $150,000 and sold it to Roan on March 12, 20X2, for $180,000.
Explanation / Answer
Answer
A.
The worksheet consolidation entries to remove the effects of the intercompany sale of land:
B.
The worksheet consolidation entries needed at December 31, 20X3 and 20X4, if Bowen had initially purchased the land for $150,000 and sold it to Roan on March 12, 20X2, for $180,000
Date Particulars Dr Cr December 31, 20X2 Gain on sale of land(185000-140000) $45000 Land $45000 December 31, 20X3 Investment in Roan(70%of45000) 31500 Non controling interest of Roan 13500 Land $45000Related Questions
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