Question

Peace Computer Corporation acquired 75 percent of Symbol Software Company's stock on January 2, 20X3, by issuing bonds with a par value of $77,750 and a fair value of $95,250 in exchange for the shares. Summarized balance sheet data presented for the companies just before the acquisition follow:

	Peace Computer Company		Symbol Software Company
	Book Value	Fair Value	Book Value	Fair Value
Cash	$218,000	$218,000	$65,000	$65,000
Other Assets	$412,000	$412,000	$134,000	$134,000
Total Debits	$630,000		$199,000
Current Liabilities	$92,000	$92,000	$72,000	$72,000
Common Stock	$296,000		$65,000
Retained Earnings	$242,000		$62,000
Total Credits	$630,000		$199,000

Prepare a consolidated balance sheet immediately following the acquisition.

Answer 1

Answer :-

Consolidated balance sheet january 2, 20x3
Assets	Amount ($)
Cash ($218,000 + $65,000)	$283,000
Other Assets($412,000 + $134,000)	$546,000
Total assets	$829,000
Liabilities and Stockholder's Equity Liabilities :
Current liabilities($92,000 + $72,000)	$164,000
Bonds payable	$77,750
Bonds Premium($95,250 - $77,750)	$17,500
Common stock	$296,000
Retained earnings	$242,000
Non - controlling interest in NS Company	$31,750
Total liabilities and stockholder's equity	$829,000

Working note :-

Non - controlling interest in NS Company
Particulars	Amount($)
Common stock	$65,000
Add : Retained earnings	$62,000
Less : Investment in NS company	($95,250)
Non - controlling interest	$31,750