70.2K

Verified Solution

Link Copied!

Stage Compony operates on a calendsr$-$year basis, reporting its results of operations quarterly. For the first quarter of $20$X$1,$ Stage

reported sales of $$254,000$ and operating expenses of $$194,000$ and paid dividends of $$14,000.$ On April $1,20$X$1,$ Porachute Theaters

Inc. acquired $85$ percent of Stage's common stock for $$799,000.$ At that date, the fair volue of the noncontrolling interest wos $$141,000,$

and Stage had $100,000$ outstanding shares of $$1$ par common stock, originally issued at $$6$ per share. The differential is related to

goodwill. On December $31,20$X$1,$ the mansgement of Parachute Thesters reviewed the amount attributed to goodwill as a result of its

purchose of Stage common stock and concluded that goodwill was not impaired.

Stage's retained earnings statement for the full year $201$ appears as follows:

Retained Earnings, January $1,20$x$1$ $ $146,$ e$8$e

Net Incone $171,$ ede

Dividends $(31,$ eee$)$

Porachute Theaters accounts for its investment in Stage using the equity method.

Required:

a$.$ Present all entries that Parachute Theaters would have recorded in accounting for its investment in Stage during $20$X$1.$

b$.$ Present all consolidation entries needed in a worksheet to prepare a complete set of consolidated financial statements for the year

$201.$

Answer is complete but not entirely correct.

Complete this question by entering your answers in the tabs below.

Present all consolidation entries needed in a worksheet to prepare a complete set of consolidated financial statements for the

year $201.$

Answer & Explanation Solved by verified expert

See Answer