On December 31,2013,Dixie Corporation Has the Following Information AvailableOn December 31,2013,Grimsled Corporation Buys an 80% Interest in Dixie

Question

Examlex · Accepted Answer

The Answer is Requirement 1
Total stockholders' equity at January 1,2014:
$300,000 + $20 (5,000)= $400,000
Grimsled's percent ownership:
16,000 / 24,000 = 0.64
Grimsled's share of stockholders' equity at January 1,2014:
0.64 × $400,000 = $256,000
Grimsled's prior share of stockholders' equity at January 1,2014 (Before additional sale):
$300,000 × 80% = $240,000
Increase in ownership: $256,000 - $240,000 = $16,000
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\begin{array} { l } ext { Investment }&16,000 \ ext { Additional paid-in capital }&&16,000\end{array}

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Requirement 2
Total stockholders' equity at January 1,2014:
$300,000 + $35 (5,000)= $475,000
Grimsled's percent ownership:
0.64
Grimsled's share of stockholders' equity at January 1,2014:
0.64 × $475,000 = $304,000
Grimsled's prior share of stockholders' equity at January 1,2014 (Before additional sale):
$300,000 × 80% = $240,000
Increase in ownership: $304,000 - $240,000 = $64,000
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\begin{array}{lrr} ext { Investment }&64,000\ ext { Additional paid-in capital } &&64,000\\end{array}

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Requirement 3
Total stockholders' equity at January 1,2014:
$300,000 + $10 (5,000)= $350,000
Grimsled's percent ownership:
0.64
Grimsled's share of stockholders' equity at January 1,2014:
0.64 × $350,000 = $224,000
Grimsled's prior share of stockholders' equity at January 1,2014 (Before additional sale):
$300,000 × 80% = $240,000
Decrease in ownership: $240,000 - $224,000 = $16,000
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\begin{array}{lrr} ext {Additional paid-in capital } &16,000\ ext { Investment} &&16,000\\end{array}

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On December 31,2013,Dixie Corporation Has the Following Information Available On December 31,2013,Grimsled Corporation Buys an 80% Interest in Dixie

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