Poole Made the Following Purchases of Smarte Company Common Stock

question 3

Essay

Poole made the following purchases of Smarte Company common stock:
Stockholders' equity information for Smarte Company for 2016 and 2017 follows:
On July 1,2017,Poole sold 14,000 shares of Smarte Company common stock on the open market for $22 per share.The shares sold were purchased on January 1,2016.Smarte notified Poole that its net income for the first six months was $70,000.Any difference between cost and book value relates to subsidiary land.Poole uses the cost method to account for its investment in Smarte Company.
Required:
A.Prepare the journal entry made by Poole to record the sale of the 14,000 shares on July 1,2017.
B.Prepare the workpaper eliminating entries needed for a consolidated statements workpaper on December 31,2017.
C.Compute the amount of noncontrolling interest that would be reported on the consolidated balance sheet on December 31,2017.

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Definitions:

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Recurring purchases of the same goods or services without significant modification or consideration of new suppliers, typically routine for businesses.

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The process of discussing and determining the terms of a contract between two or more parties, aiming to reach a mutual agreement that benefits all involved.