Plump Corporation acquired 100 percent of Slim Corporation's
common stock on December 31, 20X2, for $239,000. Data from the
balance sheets of the two companies included the following amounts
as of the date of acquisition:
Item | Plump Corporation |
Slim Corporation |
||||||
Cash | $ | 26,000 | $ | 18,000 | ||||
Accounts Receivable | 89,000 | 48,000 | ||||||
Inventory | 114,000 | 60,000 | ||||||
Buildings & Equipment (net) | 230,000 | 158,000 | ||||||
Investment in Slim Corporation Stock | 239,000 | |||||||
Total Assets | $ | 698,000 | $ | 284,000 | ||||
Accounts Payable | $ | 89,000 | $ | 18,000 | ||||
Notes Payable | 132,000 | 65,000 | ||||||
Common Stock | 86,000 | 42,000 | ||||||
Retained Earnings | 391,000 | 159,000 | ||||||
Total Liabilities & Stockholders’ Equity | $ | 698,000 | $ | 284,000 | ||||
At the date of the business combination, Slim's net assets and
liabilities approximated fair value except for inventory, which had
a fair value of $87,000, and buildings and equipment (net), which
had a fair value of $169,000.
Required:
a. Prepare the consolidating 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.)
Journal Entries:
Record the basic consolidation entry.
Record the excess value (differential) reclassification entry.
Plump Corporation acquired 100 percent of Slim Corporation's common stock on December 31, 20X2, for $239,000....
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