Chapter 08 – Intercompany Indebtedness
P8–16 (continued)
c.
Book Value Calculations:
NCI
30%
+
Fern Corp.
70%
=
Common
Stock
+
Retained
Earnings
Beginning Book Value
45,202
105,470
50,000
100,672
+ Net Income
9,071
21,165
30,236
– Dividends
(3,000)
(7,000)
(10,000)
Ending Book Value
51,273
119,635
50,000
120,908
Basic Consolidation Entry
Common Stock
50,000
Retained Earnings
100,672
Income from Vincent Co.
21,165
NCI in NI of Vincent Co.
9,071
Dividends Declared
10,000
Investment in Vincent Co. Stock
119,635
NCI in NA of Vincent Co. Stock
51,273
Excess Value (Differential) Calculations:
NCI
30%
+
Fern Corp.
70%
=
Buildings and
Equipment
+
Acc. Depr.
Beg. balance
14,400
33,600
56,000
(8,000)
Changes
(1,200)
(2,800)
(4,000)
Ending balance
13,200
30,800
56,000
(12,000)
Amortized Excess Value Reclassification Entry:
Depreciation expense
4,000
Income from Vincent Co.
2,800
NCI in NI of Vincent Co.
1,200
Excess Value (Differential) Reclassification Entry:
Buildings and Equipment
56,000
Accumulated Depreciation
12,000
Investment in Vincent Co. Stock
30,800
NCI in NA of Vincent Co. Stock
13,200
Remove Gain on Land:
Investment in Vincent Co. Stock
5,600
NCI in NA of Vincent Co. Stock
2,400
Land
8,000
