# Pisa Company acquired 75 percent of Siena Company on January 1, 20X3 for \$712,500. The fair value of

### Question Description:

25

Pisa Company acquired 75 percent of Siena Company on January 1, 20X3 for \$712,500. The fair value of 1 answer below » Pisa Company acquired 75 percent of Siena Company on January 1, 20X3 for \$712,500. The fair value of the non-controlling interest was equal to 25 percent of book value. On the date of acquisition, Siena had common stock outstanding of \$300,000 and a balance in retained earnings of \$650,000. During 20X3, Siena purchased inventory for \$35,000 and sold it to Pisa for \$50,000. Of this amount, Pisa reported \$20,000 in ending inventory in 20X3 and later sold it in 20X4. In 20X4, Pisa sold inventory it had purchased for \$40,000 to Siena for \$60,000. Siena sold \$45,000 of this inventory in 20X4. View complete question » Pisa Company acquired 75 percent of Siena Company on January 1, 20X3 for \$712,500. The fair value of the non-controlling interest was equal to 25 percent of book value. On the date of acquisition, Siena had common stock outstanding of \$300,000 and a balance in retained earnings of \$650,000. During 20X3, Siena purchased inventory for \$35,000 and sold it to Pisa for \$50,000. Of this amount, Pisa reported \$20,000 in ending inventory in 20X3 and later sold it in 20X4. In 20X4, Pisa sold inventory it had purchased for \$40,000 to Siena for \$60,000. Siena sold \$45,000 of this inventory in 20X4. Income and dividend information for Siena for 20X3 and 20X4 are as follows: Net Income: 2003: \$150,000 Dividends 2004: \$40,000 2003: \$200,000 2004: \$50,000 Parent Company uses the fully adjusted equity method. Required: a. Present the worksheet elimination journal entries necessary to prepare consolidated financial statements for 2003. b. Present the worksheet elimination journal entries necessary to prepare consolidated financial statements for 2004. Attachments: Q.-Attachment….docx View less » Sep 07 2015 01:07 PM