On January 1,2008,Vector Company acquired 80 percent of Scalar Company's ownership on for $120,000 cash.At that date,the fair value of the noncontrolling interest was $30,000.The book value of Scalar's net assets at acquisition was $125,000.The book values and fair values of Scalar's assets and liabilities were equal,except for buildings and equipment,which were worth $15,000 more than book value.Buildings and equipment are depreciated on a 10-year basis.Although goodwill is not amortized,the management of Vector concluded at December 31,2008,that goodwill from its acquisition of Scalar shares had been impaired and the correct carrying amount was $5,000.Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders.(Note that Vector Company does not adjust its Income from Subsidiary for goodwill impairment under the basic equity method. )No additional impairment occurred in 2009.
Trial balance data for Vector and Scalar on December 31,2009,are as follows:
Required:
1)Provide all eliminating entries needed to prepare a three-part consolidation workpaper as of December 31,2009.
2)Prepare a three-part consolidation workpaper for 2009 in good form.

Question

On January 1,2008,Vector Company acquired 80 percent of Scalar Company's ownership on for $120,000 cash.At that date,the fair value of the noncontrolling interest was $30,000.The book value of Scalar's net assets at acquisition was $125,000.The book values and fair values of Scalar's assets and liabilities were equal,except for buildings and equipment,which were worth $15,000 more than book value.Buildings and equipment are depreciated on a 10-year basis.Although goodwill is not amortized,the management of Vector concluded at December 31,2008,that goodwill from its acquisition of Scalar shares had been impaired and the correct carrying amount was $5,000.Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders.(Note that Vector Company does not adjust its Income from Subsidiary for goodwill impairment under the basic equity method. )No additional impairment occurred in 2009.
Trial balance data for Vector and Scalar on December 31,2009,are as follows:
Required:
  1)Provide all eliminating entries needed to prepare a three-part consolidation workpaper as of December 31,2009.
2)Prepare a three-part consolidation workpaper for 2009 in good form.

Quizplus · Accepted Answer

The Answer of On January 1,2008,Vector Company acquired 80 percent of Scalar Company's ownership on for $120,000 cash.At that date,the fair value of the noncontrolling interest was $30,000.The book value of Scalar's net assets at acquisition was $125,000.The book values and fair values of Scalar's assets and liabilities were equal,except for buildings and equipment,which were worth $15,000 more than book value.Buildings and equipment are depreciated on a 10-year basis.Although goodwill is not amortized,the management of Vector concluded at December 31,2008,that goodwill from its acquisition of Scalar shares had been impaired and the correct carrying amount was $5,000.Goodwill and goodwill impairment were assigned proportionately to the controlling and noncontrolling shareholders.(Note that Vector Company does not adjust its Income from Subsidiary for goodwill impairment under the basic equity method. )No additional impairment occurred in 2009.
Trial balance data for Vector and Scalar on December 31,2009,are as follows:
Required:
  1)Provide all eliminating entries needed to prepare a three-part consolidation workpaper as of December 31,2009.
2)Prepare a three-part consolidation workpaper for 2009 in good form.

On January 1,2008,Vector Company Acquired 80 Percent of Scalar Company's