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Problem 2 *need to show work and correct work Luball Corporation acquired an 80 percent...

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Accounting

Problem 2 *need to show work and correct work

Luball Corporation acquired an 80 percent interest in Tocurt Corporation on January 2, 20X2 for $800,000. On this date the capital stock and retained earnings of the two companies were as follows:

Luball Tocurt
Capital stock $2,000,000 $500,000
Retained earnings 600,000 200,000

The assets and liabilities of Tocurt were stated at their fair values when Luball acquired its 80 percent interest. Luball uses the equity method to account for its investment in Tocurt.

Net income and dividends for 20X2 for the affiliated companies were

Luball Tocurt
Net income $300,000 $90,000
Dividends declared 180,000 50,000
Dividends payable Dec. 31, 20X2 90,000 25,000

Required:

Calculate the amounts at which the following items should appear in the consolidated Financial statement on December 31, 20X2:

1. Capital stock

2. Goodwill

3. Consolidated retained earnings

4. Minority interest

5. Dividends payable

6. Investment income

7. Consolidated (controlling group) Net Income

8. Minority (non-controlling) income.

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