On January 1,20X9,Zigma Company Acquired 100 Percent of Standard Company's

question 5

Essay

On January 1,20X9,Zigma Company acquired 100 percent of Standard Company's common shares at underlying book value.Zigma uses the equity method in accounting for its ownership of Standard.On December 31,20X9,the trial balances of the two companies are as follows:

Required:
1.Prepare the consolidation entries needed as of December 31,20X9,to complete a consolidation worksheet.
2.Prepare a three-part consolidation worksheet as of December 31,20X9.
Problem 57 (continued):

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Definitions:

Probabilities

A measure of the likelihood that an event will occur, expressed on a scale from 0 (impossible) to 1 (certain).

Invest

Distributing financial resources with the aim of achieving financial gain or income.

Probability

A measure of the likelihood that an event will occur, often expressed as a number between 0 and 1.

Expected Value

A calculation in probability theory that summarizes the expected return or outcome from a random event or situation.