Question

Talbott Company purchased 80 percent of Short Company's stock on January 1, 20X8, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 20 percent of Short's book value. On December 31, 20X9, Short purchased 10 percent of Talbott's stock. Balance sheets for the two companies on December 31, 20X9, are as follows: TALBOTT COMPANY Condensed Balance Sheet December 31, 20x9 $ 84,000 Accounts Payable 85,000 Accounts Receivable 147,000 Bonds Payable 395,000 Inventory 149,000 Common Stock 330,000 Buildings & Equipment (net) 370,000 Retained Earnings 340,000 Investment in Short Co. 400,000 Total Assets $1,150,000 Total Liabilities & Equities $1,150,000 Cash $ Cash Accounts Receivable Inventory Buildings & Equipment (net) Investment in Talbott Co. Total Assets SHORT COMPANY Condensed Balance Sheet December 31, 20X9 $ 45,000 Accounts Payable 93,000 Bonds Payable 124,000 Common Stock 330,000 Retained Earnings 67,000 $659,000 Total Liabilities & Equities $ 54,000 105,000 230,000 270,000 $659,000
Required: Assuming that the treasury stock method is used in reporting Talbott's shares held by Short, prepare a consolidated balance sheet worksheet and consolidated balance sheet for December 31, 20X9. (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 deblt column of the worksheet. Similarly, combine all credit entrles into one amount and enter this amount in the credit column of the worksheet.) TALBOTT COMPANY AND SUBSIDIARY Consolidated Balance Sheet Worksheet December 31, 2029 Consolidation Entries Talbott Co. Short Co. DR CR Consolidated Balance Sheet Cash Accounts Receivable Inventory Buildings & Equipment (net) Investment in Short Co. Investment in Talbott Co. s 0 S 0 s $ 0 S Total Assets Accounts Payable Bonds Payable Common Stock Retained Earnings Treasury Stock NCI in NA of Short Co. Total Liabilities & Equity S $ 0 s 0 s
TALBOTT COMPANY AND SUBSIDIARY Consolidated Balance Sheet December 31, 20X9 Current assets: s 0 Noncurrent assets: Total Assets Liabilities: Stockholders' equity: Controlling interest: Total controlling interest $ 0 Total equity before reduction for treasury shares $ 0 Total stockholders' equity Total Liabilities and Stockholders' Equity S

Answer 1

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