On January 1, 2009, Vacker Co

question 84

Essay

On January 1, 2009, Vacker Co. acquired 70% of Carper Inc. by paying $650,000. This included a $20,000 control premium. Carper reported common stock on that date of $420,000 with retained earnings of $252,000. A building was undervalued in the company's financial records by $28,000. This building had a ten-year remaining life. Copyrights of $80,000 were to be recognized and amortized over 20 years.
Carper earned income and paid cash dividends as follows:

On December 31, 2011, Vacker owed $30,800 to Carper. There have been no changes in Carper's common stock account since the acquisition.
Required:
If the equity method had been applied by Vacker for this acquisition, what were the consolidation entries needed as of December 31, 2011?

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Definitions:

Fetus

A developing human from approximately the end of the eighth week after conception until birth.

Prenatal Development

The process of growth and development within the womb from the formation of an embryo through to the development of a fetus until birth.

Central Nervous System

The Central Nervous System (CNS) is comprised of the brain and spinal cord, functioning as the main processing center for the entire nervous system, controlling thoughts, movements, and bodily functions.

Lanugo

Lanugo is fine, soft hair that covers the body of a fetus or a newborn as a form of insulation, which is usually shed before or shortly after birth.