Problem: Workpaper Entry
Workpaper Entries for Three Years LO6 On January 1, 2010, Piper Company acquired an 80% in Sand Company for $2,276,000. At that time the capital stock and retained earnings of Sand Company were $1,800,000 and $700,000, respectively. Differences between the fair value and the book value of the identifiable assets of Sand Company were as follows: Fair Value in Excess of Book Value Inventory $45,000 Equipment (net) 50,000 The book values of all other assets and liabilities of Sand Company were equal to their fair values on January 1, 2010. The equipment had a remaining useful life of eight years. Inventory is accounted for on a FIDO basis. Sand Company reported net income and declared dividends for 2010 through 2012 are shown here: 2010 2011 2012 Net Income $100,000 $150,000 $80,000 Dividends 20,000 30,000 15,000 Prepare the eliminating / adjusting entries needed on the consolidated worksheet for the years ended 2010, 2011, and 2012. (It is not necessary to prepare the worksheet.)
• Assume the use of the cost method.
• Assume the use of the partial equity method.
• Assume the use of the complete equity method.
The response must include a reference list. Using one-inch margins, double-space, Times New Roman 12 pnt font and APA style of writing and citations.