Question

The December 31, 20X8, balance sheets for Pint Corporation and

its 70 percent-owned subsidiary Saloon Company contained the
following summarized amounts:
PINT CORPORATION AND SALOON COMPANY
Balance Sheets
December 31, 20X8
Pint
Corporation
Saloon
Company
Assets
Cash & Receivables
110,000
50,000
Inventory
151,000
114,000
Buildings & Equipment (net)
322,000
300,000
Investment in Saloon Company
232,500
Total Assets
815,500
464,000
Liabilities & Equity
Accounts Payable
103,500
73,000
Common Stock
190,000
141,000
Retained Earnings
522,000
250,000
Total Liabilities & Equity
815,500
464,000
Pint acquired the shares of Saloon Company on January 1, 20X7. On
December 31, 20X8, assume Pint sold inventory to Saloon during 20X8
for 111,000andSaloonsoldinventorytoPintfor303,000. Pint’s
balance sheet contains inventory items purchased from Saloon for
99,000.TheitemscostSaloon59,000 to produce. In addition,
Saloon’s inventory contains goods it purchased from Pint for
33,000thatPinthadproducedfor19,800. Assume Saloon reported
net income of 73,000anddividendsof14,600.
Required:
a. Prepare all consolidation entries needed to complete a
consolidated balance sheet worksheet as of December 31,
20X8. (If no entry is required for a
transaction/event, select "No journal entry required" in the first
account field. Do not round intermediate
calculations.)
b. Prepare a consolidated balance sheet worksheet as of December
31, 20X8. (Do not round intermediate calculations.
Values in the first two columns (the "parent" and "subsidiary"
balances) that are to be deducted should be indicated with a minus
sign, while all values in the "Consolidation Entries" columns
should be entered as positive values. For accounts where multiple
adjusting entries are required, combine all debit entries into one
amount and enter this amount in the debit column of the worksheet.
Similarly, combine all credit entries into one amount and enter
this amount in the credit column of the worksheet.)

Answer 1

To prepare the consolidated balance sheet worksheet as of December 31, 20X8, consolidation entries need to be made. Once the entries are made, the consolidated balance sheet can be prepared.

Step-by-step explanation:

To prepare the consolidated balance sheet worksheet as of December 31, 20X8, we need to make some consolidation entries. The entries include eliminating the investment in the subsidiary, adjusting inventory for intercompany transfers, and eliminating intercompany payables and receivables.

The detailed steps and entries can be found in the worksheet provided. Once these entries are made, we can prepare the consolidated balance sheet, combining the balances of the parent and subsidiary after adjusting for the consolidation entries.