Comprehensive Problem - Majority-Owned Subsidiary

Comprehensive Problem: Majority-Owned Subsidiary 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 noncontrolling 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:  Item Master Corporation Stanley Wood Products Company Debit Credit Debit Credit Cash and Receivables $ 81,000 $ 65,000 Inventory 260,000 90,000 Land 80,000 80,000 Buildings and Equipment 500,000 150,000 Investment in Stanley Wood Products Stock 188,000 Cost of Goods Sold 120,000 50,000 Depreciation Expense 25,000 15,000 Inventory Losses 15,000 5,000 Dividends Declared 30,000 10,000 Accumulated Depreciation $ 205,000 $105,000 Accounts Payable 60,000 20,000 Notes Payable 200,000 50,000 Common Stock 300,000 100,000 Retained Earnings 314,000 90,000 Sales 200,000 100,000 Income from Subsidiary 20,000 $1,299,000 $1,299,000 $465,000 $465,000 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. 1. Prepare all entries recorded by the parent co with respect to its investment in the sub for 20X5 ONLY 2. Prepare all elimination entries for 20X5 3. Prepare a three-part worksheet as of December 31, 20X5. Include this in table format in the Word document.