Question

Bowen Corporation owns 70 percent of Roan Corporation’s voting common stock. On March 12, 20X2, Roan sold land it had purchased for $140,000 to Bowen for $185,000. Bowen plans to build a new warehouse on the property in 20X3. Required: a. Prepare the worksheet consolidation entries to remove the effects of the intercompany sale of land in preparing the consolidated financial statements at December 31, 20X2 and 20X3. (If no entry is

Answer 1

Answer: Check attachment

Explanation:

The worksheet consolidation entries to remove the effects of the intercompany sale of land in preparing the consolidated financial statements at December 31, 20X2 and 20X3 has been prepared and attached.

Note:

Gain on land sale = 185,000 - $140,000

= $45,000

Investment in Roan Corporation:

= 70% × $45,000

= 0.7 × $45,000

= $31,500

Non controlling interest of Roan Corporation = $45,000 - $31,500

= $13,500

Check the attachment for further explanation.