Police Corporation acquired 100 percent of Station Corporation's voting shares on January 1, 20X3, at...
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Accounting
Police Corporation acquired 100 percent of Station Corporation's voting shares on January 1, 20X3, at underlying book value. At that date, the book values and fair values of Station's assets and liabilities were equal. Police uses the equity method in accounting for its investment in Station. Adjusted trial balances for Police and Station on December 31, 20X3, are as follows:
Item
Police Corporation
Station Corporation
Debit
Credit
Debit
Credit
Current Assets
$ 156,000
$ 116,000
Depreciable Assets (net)
344,000
231,000
Investment in Station Corporation
138,000
Depreciation Expense
24,000
14,000
Other Expenses
104,000
74,000
Dividends Declared
45,000
22,000
Current Liabilities
$ 40,000
$ 30,000
Long-Term Debt
113,000
179,000
Common Stock
192,000
84,000
Retained Earnings
222,000
34,000
Sales
202,000
130,000
Income from Station Corporation
42,000
$ 811,000
$ 811,000
$ 457,000
$ 457,000
Required:
Prepare the consolidation entry required on December 31, 20X3, to prepare consolidated financial statements.
Prepare a three-part consolidation worksheet as of December 31, 20X3.
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