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PR Santer 2014

Powell Corporation acquired 90% of Santer Corporation on January 1, 2014 for $11,700. Financial statements for Powell and Santer at the end of 2015 appear in consolidation working papers, with Powell accounting for its investment in Santer using the equity method. Powell owed Santer $100 for an open account and was due $450 in dividends receivable from Santer.

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Ditiya Pratama
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120 views2 pages

PR Santer 2014

Powell Corporation acquired 90% of Santer Corporation on January 1, 2014 for $11,700. Financial statements for Powell and Santer at the end of 2015 appear in consolidation working papers, with Powell accounting for its investment in Santer using the equity method. Powell owed Santer $100 for an open account and was due $450 in dividends receivable from Santer.

Uploaded by

Ditiya Pratama
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Powell Corporation acquired 90% of the voting stock of Santer Corporation on January 1, 2014 for $11,700

when Santer had Capital Stock of $5,000 and Retained Earnings of $4,000. The amounts reported on the
financial statements approximated fair value, with the exception of inventories, which were understated
on the books by $500 and were sold in 2014, land which was undervalued by $1,000, and equipment with
a remaining useful life of 5 years under the straight-line method which was undervalued by $1,500. Any
remainder was assigned to goodwill.

Financial statements for Powell and Santer Corporations at the end of the fiscal year ended December 31,
2015 appear in the first two columns of the partially completed consolidation working papers. Powell has
accounted for its investment in Santer using the equity method of accounting. Powell Corporation owed
Santer Corporation $100 on open account at the end of the year. Dividends receivable in the amount of
$450 payable from Santer to Powell is included in Powell's net receivables.
Required:
Complete the consolidation working papers for Powell Corporation and Subsidiary for the year ended
December 31, 2015.

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