HELP advance Accounting 12th edition Problem 8-4 (LO 2) Worksheet, subsidiary stock sale with parent purchase, intercompany merchandise. On January 1, 2016, Mitta Corporation acquires a 60% interest (12,000 shares) in Train Company for $156,000. Train stockholders’ equity on the purchase date is as follows: Common stock ($5 par) $100,000 Paid-in capital in excess of par 50,000 Retained earnings 80,000 Total stockholders’ equity $230,000 At the purchase date, Train’s book values for assets and liabilities closely approximate fair values. Any excess of cost over book value is attributed to goodwill. On January 1, 2017, Train Company sells 5,000 shares of common stock in a public offering at $20 per share. Mitta Corporation purchases 4,000 shares. During 2017, Mitta sells $30,000 of goods to Train at a gross profit of 25%. There are $6,000 of Mitta goods in Train’s beginning inventory and $8,000 of Mitta goods in Train’s ending inventory. Merchandise ...
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