On January 1,20X8,Gregory Corporation Acquired 90 Percent of Nova Company's

question 6

Essay

On January 1,20X8,Gregory Corporation acquired 90 percent of Nova Company's voting stock,at underlying book value.The fair value of the noncontrolling interest was equal to 10 percent of the book value of Nova at that date.Gregory uses the equity method in accounting for its ownership of Nova.On December 31,20X8,the trial balances of the two companies are as follows:

Required:
1)Provide all consolidating entries required as of December 31,20X8,to prepare consolidated financial statements.
2)Prepare a three-part consolidation worksheet.
Problem 48 (continued):

---

Definitions:

Estimates of Inputs

Projections or calculations regarding the amount or type of resources (like raw materials, labor, and capital) required to achieve a certain production output.

Flexible Production Capacity

The ability of a manufacturing system to adjust and adapt its output levels in response to changes in demand or production needs.

Global Network

A worldwide interconnected infrastructure, enabling businesses to transact, communicate, and collaborate across borders.

Demand

The amount of a particular product or service that consumers are willing and able to purchase at a given price.