Pencil Company acquired 80 percent of Stylus Corporation’s stock
on January 2, 20X3, for $88,000 cash. Summarized balance sheet data
for the companies on December 31, 20X2, follow:
Pencil Company | Stylus Corporation | ||||||||||||||||
Book Value | Fair Value | Book Value | Fair Value | ||||||||||||||
Cash | $ | 215,000 | $ | 215,000 | $ | 55,000 | $ | 55,000 | |||||||||
Other Assets | 420,000 | 420,000 | 131,000 | 131,000 | |||||||||||||
Total Debits | $ | 635,000 | $ | 186,000 | |||||||||||||
Current Liabilities | $ | 96,000 | 96,000 | $ | 76,000 | 76,000 | |||||||||||
Common Stock | 297,000 | 55,000 | |||||||||||||||
Retained Earnings | 242,000 | 55,000 | |||||||||||||||
Total Credits | $ | 635,000 | $ | 186,000 | |||||||||||||
Required:
Prepare a consolidated balance sheet immediately following the
acquisition.
|
PENCIL COMPANY AND SUBSIDIARY | ||||
Consolidated Balance Sheet | ||||
January 2, 20X3 | ||||
Assets | ||||
Cash (215000+55000-88000) | 182000 | |||
other assets (420000+131000) | 551000 | |||
total assets | 733000 | |||
Liabilities & stockholders equity | ||||
Current liability | 172000 | |||
Minority interest (186000-76000)*20% | 22000 | |||
Common stock | 297000 | |||
Retained earnings | 242000 | |||
Total liabilities & stockholders equity | 733000 |
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