Exercise $4-19($Static$)$ Wholly Owned Subsidiary with a Differential LO $4-3$

Stick Corporation is a wholly owned subsidiary of Point Corporation. Point acquired ownership of Stick on January $1,203,$ for $$28,000$ above Stick's reported net assets. At that date, Stick reported common stock outstanding of $$60,000$ and retained earnings of $$90,000.$ The differential is assigned to equipment with an economic life of seven years at the date of the business combination. Stick reported net income of $$30,000$ and paid dividends of $$12,000$ in $203.$

Required:

a$.$ Prepare the journal entries recorded by Point Corporation during $203$ on its books if Point accounts for its investment in Stick using the equity method.

b$.$ Prepare the consolidating entries needed at December $31,203,$ to prepare consolidated financial statements.

Complete this question by entering your answers in the tabs below.

Prepare the consolidating entries needed at December $31,203,$ to prepare consolidated financial statements.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

Journal entry worksheet

A B

C

Record the excess value $($differential$)$ reclassification entry.

Note: Enter debits before credits.

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