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    Consolidation / Eliminating entries

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    P5-36 Consolidation Workpaper at End of First Year of Ownership
    Power Corporation acquired 75 percent of Best Company's ownership on January 1, 20X8, for $96,000.
    At that date, the fair value of Best's buildings and equipment was $20,000 more than book value. Buildings and equipment are depreciated on a 10-year basis. Although goodwill is not amortized, the management of Power concluded at December 31, 20X8, that goodwill involved in its purchase of Best shares had been impaired and the correct carrying value was $2,500.
    Trial balance data for Power and Best on December 31, 20X8, are as follows:

    Power Corporation Best Company
    Item Debit Credit Debit Credit
    Cash $47,500 $21,000
    Accounts Receivable 70,000 12,000
    Inventory 90,000 25,000
    Land 30,000 15,000
    Buildings and Equipment 350,000 150,000
    Investment in Best Co. Stock 100,500
    Cost of Goods Sold 125,000 110,000
    Wage Expense 4,200 27,000
    Depreciation Expense 25,000 10,000
    Interest Expense 12,000 4,000
    Other Expenses 13,500 5,000
    Dividends Declared 30,000 16,000
    Accumulated Depreciation $145,000 $40,000
    Accounts Payable 45,000 16,000
    Wages Payable 17,000 9,000
    Notes Payable 150,000 50,000
    Common Stock 200,000 60,000
    Retained Earnings 102,000 40,000
    Sales 260,000 180,000
    Income from Subsidiary 16,500
    $897,700 $935,500 $395,000 $395,000

    Required
    a. Give all eliminating entries needed to prepare a three-part consolidation workpaper as of December 31, 2008
    b. Prepare a three-part consolidation workpaper for 20X8 in good form.

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    https://brainmass.com/business/journal-entries/consolidation-eliminating-entries-239301

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    The solution explains the eliminating entries required for consolidation

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