Accounting Assignment Final

Master Corporation acquired 80 percent ownership of Stanley Wood Products Company on January 1,

20X1, for $160,000. On that date, the fair value of the non-controlling interest was $40,000, and Stanley

reported retained earnings of $50,000 and had $100,000 of common stock outstanding. Master has

used the equity method in accounting for its investment in Stanley.

Trial balance data for the two companies on December 31, 20X5, are as follows:

Additional Information:

1. On the date of combination, the fair value of Stanley’s depreciable assets was $50,000

more than book value. The differential assigned to depreciable assets should be written

off over the following 10-year period.

2. There was $10,000 of intercorporate receivables and payables at the end of 20X5.

Your paper should be 8 in length, and address thoroughly Parts A, B and C below. Be sure to examine

the Portfolio Project rubric to guide your project writing and presentation.

3. Give all journal entries that Master recorded during 20X5 related to its investment in

Stanley.

4. Give all eliminating entries needed to prepare consolidated statements for 20X5.

5. Prepare a three-part worksheet as of December 31, 20X5. Include this in table format in

the Word document. Following your worksheet, in two or three pages analyze the

process, specifically addressing how the transactions impact the financial statements,

and how an outside user of the financial statements would use the information

provided.

If outside sources are used to inform your response, include all citations and an appropriate reference

page. In completing your paper, spend time to assure that the formatting complies with APA guidelines,

and thoroughly proofread and grammar-check your final product.