Advance Accounting 38448
On October 1, 2011, Packer Company purchased 90% of the common stock of Shipley Company for $290,000. Additional information for both companies for 2011 follows:PACKERSHIPLEYCommon stock$300,000$90,000Other contributed capital120,00040,000Retained Earnings, 1/1240,00050,000Net Income260,000160,000Dividends declared (10/31)40,0008,000Any difference between implied and book value relates to Shipley’s land. Packer uses the cost method to record its investment in Shipley. Shipley Company’s income was earned evenly throughout the year.Required:A.Prepare the workpaper entries that would be made on a consolidated statements workpaper on December 31, 2011. Use the full year reporting alternative.B.Calculate the controlling interest in consolidated net income for 2011.