Cost method, second year, eliminations, statements. The trial balances of Pepper and Salt companies of Exercise 7 for December 31, 20X2, are presented as follows:
|
Pepper |
Salt |
|
|
Current Assets |
152,000 |
115,000 |
|
Depreciable Fixed Assets |
400,000 |
200,000 |
|
Accumulated Depreciation |
130,000 |
40,000 |
|
Investment in Salt Company |
250,000 |
|
|
Current Liabilities |
80,000 |
|
|
Common Stock ($10 par) |
300,000 |
100,000 |
|
Retained Earnings, January 1, 20X2 |
244,000 |
170,000 |
|
Sales |
200,000 |
100,000 |
|
Expenses |
160,000 |
85,000 |
|
Dividend Income (from Salt Company) |
8,000 |
|
|
Dividends Declared |
10,000 |
|
|
Total |
0 |
Pepper Company continued to use the cost method.
1. Prepare all the eliminations and adjustments that would be made on the 20X2 consolidated worksheet.
2. If you did not solve Exercise 4 or 6, prepare the 20X2 consolidated income statement and its related income distribution schedules.