Maurice Tutor
$15/per page/Negotiable
Preparation of Consolidated Balance Sheet
Lofton Company owns 60 percent of Temple Corporation’s voting shares, purchased on May 17, 20X1, at book value. At that date, the fair value of the noncontrolling interest was equal to 40 percent of the book value of Temple Corporation. The companies’ permanent accounts on December 31, 20X6, contained the following balances:
| Â |
Lofton Company |
Temple Corporation |
| Â | ||
|
Cash and Receivables |
$101,000 |
$ 20,000 |
|
Inventory |
80,000 |
40,000 |
|
Land |
150,000 |
90,000 |
|
Buildings & Equipment |
400,000 |
300,000 |
|
Investment in Temple Corporation Stock |
141,000 |
 |
| Â |
872,000 |
$450,000 |
|
Accumulated Depreciation |
$135,000 |
$ 85,000 |
|
Accounts Payable |
90,000 |
25,000 |
|
Notes Payable |
200,000 |
90,000 |
|
Common Stock |
100,000 |
200,000 |
|
Retained Earnings |
347,000 |
50,000 |
| Â |
$872,000 |
$450,000 |
On January 1, 20X2, Lofton paid $100,000 for equipment with a 10-year expected total economic life. The equipment was depreciated on a straight-line basis with no residual value. Temple purchased the equipment from Lofton on December 31, 20X4, for $91,000. Assume Lofton did not change the estimated useful life of the equipment.
Temple sold land it had purchased for $30,000 on February 23, 20X4, to Lofton for $20,000 on October 14, 20X5. Assume Lofton uses the fully adjusted equity method.
Required
a. Prepare a consolidated balance sheet worksheet in good form as of December 31, 20X6.
b. Prepare a consolidated balance sheet as of December 31, 20X6.