c. Entry (S)
Common stock (Taylor) ...................................... 300,000
Additional paid-in capital (Taylor) ..................... 90,000
Retained earnings (Taylor) ................................. 210,000
Investment in Taylor Company (80%) .......... 480,000
Noncontrolling interest in Taylor (20%) ....... 120,000
Entry (A)
Buildings .............................................................. 80,000
Goodwill ............................................................... 150,000
Investment in Taylor Company (80%) .......... 184,000
Noncontrolling interest in Taylor (20%) ....... 46,000
h. If the parent has been applying the equity method, the stockholders'
equity accounts on its books will already represent consolidated
totals. The common stock and additional paid-in capital figures to be
reported are the parent balances only. As to retained earnings, the
equity method will properly record all subsidiary net income and
amortization so that the parent balance is also a reflection of the
consolidated total.