On January 1, 2015, Parker Company acquired 90% of the common stock of Stride Co

Question

On January 1, 2015, Parker Company acquired 90% of the common stock of Stride Company for $351,000. On this date, Stride had common stock, other paid-in capital in excess of par, and retained earnings of $100,000, $40,000, and $210,000, respectively. The excess of cost over book value is due to goodwill. In both 2015 and 2016, Parker accounted for the investment in Stride using the cost method.

Problem 5-2 (LO 2) Cost method, 90%, straight-line bonds. On January 1, 2015, Parker Company On this date, Stride had common stock, other paid-in capital in excess of par, and retained earnings of $100,000, S40,000, and $210,000, respectively. The excess of cost over book value is due to goodwill. In both 2015 and 2016, Parker accounted for the investment in Stride using the cost method 90% of the common stock of Stride Company for $351,000. On January 1, 2015, Suide sold $100,000 par value of 10-year, 8% bonds for $94,000. The bonds pay interest semiannually on January and July 1 of each year. On December 31, 2015, Parker purchased all of Stride's bonds for $98,200. The bonds are still held on December 31, 2016 Both companies correctly recorded all entries relative to bonds and interest, using straight-line amortization for premium or discount The wial balncs of Parker Company and its subsidiary were as follows on December 31,2016 4,000 246,400 351,000 98,400 80,000 400,000 (120,0001 Oher Current Assets 315,200 Investment in Stride Compoy Buildingsand Equipment Accumulated Depreciakn Interest Payable Other Current Liabilises....A. Bonds Payable (8%) Discount on Bonds Payable Other long-Term Liabilities Common Stock Parker Compony. 280,000 (60,00 (98,000 (56,000! (100,000 4,800 (200,000 (,000) (200,000 ....(365,000] (100,000 40,000) (260,000! (350,00 Common Stock Stride Company Other Paid In Capital in Excess of Pa Stride Company..... Net Sales (640,0001 360,000 168,400 71,400 8,600 (8,200 27,000 50,000 Dividend Income 30,000 Totals.. Prepare the worksheet necessary to produce the consolidated financial statements of Parker and Required its subsidiary Stride for the year ended December 31, 2016. Round all computations to the nearest dollar

Explanation / Answer

Common Stock 100000 Additional paid-in capital 40000 Retained earnings 210000 Total 350000 Taken over 90% 315000 Purchase price 351000 Net Assets taken over 315000 Goodwill 36000 Consolidation worksheet Parket and Stride, a subsidiary Elimination entries Parker Co. Strides Co. Debit Credit Non-controlling interest Consolidated Balances Interest receivable 4000 4000 Other current assets 246400 315200 561600 Investment in Strides Company 351000 351000 Investment in Strides Bonds 98400 98400 Land 80000 60000 140000 Buildings & Equipment 400000 280000 Accumulated Depreciation 120000 60000 Buildings & Equipment (net) 280000 220000 500000 Goodwill 36000 36000 36000 Interest payable 4000 4000 Other current liabilities 98000 56000 154000 Bonds payable (8%) 100000 100000 Discount on bonds payable 4800 4800 4800 Other long-term liabilities 200000 200000 Common Stock 100000 100000 90000 10000 200000 Other paid-in capital 200000 40000 36000 4000 240000 Retained earnings 365000 260000 26000 625000

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