Question
In: Accounting
Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $150,000....
|
Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $150,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: |
| Item | Blank Corporation |
Faith Corporation |
||||||
| Assets | ||||||||
| Cash | $ | 65,000 | $ | 18,000 | ||||
| Accounts Receivable | 87,000 | 37,000 | ||||||
| Inventory | 110,000 | 60,000 | ||||||
| Buildings & Equipment (net) | 220,000 | 150,000 | ||||||
| Investment in Faith Corporation Stock | 150,000 | |||||||
| Total Assets | $ | 632,000 | $ | 265,000 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Accounts Payable | $ | 92,000 | $ | 35,000 | ||||
| Notes Payable | 150,000 | 80,000 | ||||||
| Common Stock | 100,000 | 60,000 | ||||||
| Retained Earnings | 290,000 | 90,000 | ||||||
| Total Liabilities & Stockholders’ Equity | $ | 632,000 | $ | 265,000 | ||||
|
At the date of the business combination, the book values of Faith’s net assets and liabilities approximated fair value. Assume that Faith Corporation’s accumulated depreciation on buildings and equipment on the acquisition date was $30,000. |
| Required: |
| a. |
Give the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
| b. |
Prepare a consolidated balance sheet worksheet. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) |
| b. |
Prepare a consolidated balance sheet worksheet. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) |
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $150,000....
Blank Corporation acquired 100 percent of Faith Corporation’s
common stock on December 31, 20X2, for $150,000. Data from the
balance sheets of the two companies included the following amounts
as of the date of acquisition:
Item
Blank
Corporation
Faith
Corporation
Assets
Cash
$
65,000
$
18,000
Accounts Receivable
87,000
37,000
Inventory
110,000
60,000
Buildings & Equipment (net)
220,000
150,000
Investment in Faith Corporation Stock
150,000
Total Assets
$
632,000
$
265,000
Liabilities and Stockholders’
Equity
Accounts Payable
$
92,000...
Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $190,000....
Blank Corporation acquired 100 percent of Faith Corporation’s
common stock on December 31, 20X2, for $190,000. Data from the
balance sheets of the two companies included the following amounts
as of the date of acquisition:
Item
Blank
Faith
Corporation
Corporation
Assets
Cash
$
67,000
$
21,000
Accounts Receivable
82,000
39,000
Inventory
111,000
64,000
Buildings and Equipment
(net)
230,000
166,000
Investment in Faith
Corporation Stock
190,000
Total Assets
$
680,000
$
290,000
Liabilities and Stockholders’
Equity
Accounts Payable
$
90,000
$...
Patrio Corporation acquired 100 percent of Aloe Corporation’s common stock on December 31, 2019, for $280,000....
Patrio Corporation acquired 100 percent of Aloe Corporation’s
common stock on December 31, 2019, for $280,000. Data from the
balance sheets of the two companies included the following amounts
as of the date of acquisition:
Item
Patrio
Aloe
Corporation
Corporation
Cash
$55,000
$48,000
Accounts Receivable
83,000
110,000
Inventory
310,000
167,000
Property & Plant (net)
200,000
105,000
Investment in Aloe Corporation Stock
280,000
Total Assets
$928,000
$430,000
Accounts Payable
$109,000
$43,000
Notes Payable
235,000
90,000
Common Stock
300,000
102,000
Retained Earnings...
Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $98,700....
Phone Corporation acquired 70 percent of Smart Corporation’s
common stock on December 31, 20X4, for $98,700. At that date, the
fair value of the noncontrolling interest was $42,300. Data from
the balance sheets of the two companies included the following
amounts as of the date of acquisition: Phone Smart Item Corporation
Corporation Cash $ 67,300 $ 40,000 Accounts Receivable 102,000
62,000 Inventory 142,000 93,000 Land 67,000 43,000 Buildings &
Equipment 419,000 253,000 Less: Accumulated Depreciation (162,000 )
(78,000 ) Investment...
Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $102,200....
Phone Corporation acquired 70 percent of Smart Corporation’s
common stock on December 31, 20X4, for $102,200. At that date, the
fair value of the noncontrolling interest was $43,800. Data from
the balance sheets of the two companies included the following
amounts as of the date of acquisition:
Phone
Smart
Item
Corporation
Corporation
Cash
$
50,300
$
21,000
Accounts Receivable
90,000
44,000
Inventory
130,000
75,000
Land
60,000
30,000
Buildings & Equipment
410,000
250,000
Less: Accumulated Depreciation
(150,000
)
(80,000
)
Investment...
Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $97,300....
Phone Corporation acquired 70 percent of Smart Corporation’s
common stock on December 31, 20X4, for $97,300. At that date, the
fair value of the noncontrolling interest was $41,700. Data from
the balance sheets of the two companies included the following
amounts as of the date of acquisition:
Phone
Smart
Item
Corporation
Corporation
Cash
$
60,300
$
31,000
Accounts Receivable
99,000
46,000
Inventory
142,000
91,000
Land
71,000
41,000
Buildings & Equipment
427,000
261,000
Less: Accumulated Depreciation
(151,000
)
(75,000
)
Investment...
Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $95,900....
Phone Corporation acquired 70 percent of Smart Corporation’s
common stock on December 31, 20X4, for $95,900. At that date, the
fair value of the noncontrolling interest was $41,100. Data from
the balance sheets of the two companies included the following
amounts as of the date of acquisition:
Phone
Smart
Item
Corporation
Corporation
Cash
$
68,300
$
37,000
Accounts Receivable
96,000
57,000
Inventory
142,000
87,000
Land
77,000
31,000
Buildings & Equipment
421,000
257,000
Less: Accumulated Depreciation
(153,000
)
(76,000
)
Investment...
Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $98,000....
Phone Corporation acquired 70 percent of Smart Corporation’s
common stock on December 31, 20X4, for $98,000. At that date, the
fair value of the noncontrolling interest was $42,000. Data from
the balance sheets of the two companies included the following
amounts as of the date of acquisition:
Phone
Smart
Item
Corporation
Corporation
Cash
$
62,300
$
21,000
Accounts Receivable
95,000
51,000
Inventory
136,000
90,000
Land
71,000
39,000
Buildings & Equipment
425,000
254,000
Less: Accumulated Depreciation
(162,000
)
(79,000
)
Investment...
On December 31, 2009, Add-On Company acquired 100 percent of the common shares of Venus Corporation...
On December 31, 2009, Add-On Company acquired 100 percent of the
common shares of Venus Corporation for $ 300,000. Information about
the Venus balance just before the acquisition is given here:
Cash and Accounts Receivable...............$ 35,000
Inventory
.................................................$75,000
Land
........................................................$100,000,
Buildings and Equipment (net) ................$220,000
Total Assets .........................................$
430,000
Accounts Payable ....................................$ 65,000
Bonds Payable ................................... $150,000
Common Stock
.........................................$100,000
Retained earnings ...................................$115,000
Total Liabilities and Stockholders'Equity$
430,000
At the date of the business combination, the net assets and
liabilities...
Bristle Corporation acquired 75 percent of Silver Corporation's common stock on December 31, 20X8, for $300,000....
Bristle Corporation acquired 75 percent of Silver Corporation's
common stock on December 31, 20X8, for $300,000. The fair value of
the noncontrolling interest at that date was determined to be
$100,000. Silver's balance sheet immediately before the combination
reflected the following balances:
Cash and Receivables$40,000
Inventory70,000
Land90,000
Buildings and Equipment (net) 250,000
Total Assets $450,000
Accounts Payable$30,000
Income Taxes Payable40,000
Bonds Payable100,000
Common Stock100,000
Retained Earnings 180,000
Total Liabilities and Stockholders'
Equity $450,000
A careful review of the fair value of Silver's assets and...
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