Exercise 3-6 On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The...

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Exercise 3-6

On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The balance sheet of Price Company and the consolidated balance sheet on December 3, 2013, were as follows:

	*Price Company*	*Consolidated*
Cash	$22,960	$40,015
Accounts receivable	31,920	59,330
Inventory	121,760	175,450
Investment in Shipley Company	193,560	—0—
Plant and equipment (net)	199,520	320,530
Land	123,190	205,993
Total	$692,910	$801,318

Accounts payable	$41,610	$115,860
Note payable	97,900	97,900
Noncontrolling interest in Shipley Company	—0—	34,158
Common stock	304,200	304,200
Other contributed capital	155,970	155,970
Retained earnings	93,230	93,230
Total	$692,910	$801,318

On the date of acquisition, the stockholders’ equity section of Shipley Company’s balance sheet was as follows:

Common stock		$84,810
Other contributed capital		92,240
Retained earnings		44,730
Total		$221,780

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Answer 1

Answer #1

SHIPLEY COMPANY
Balance Sheet
December 31, 2013
Cash	17,055
Accounts Receivable	27,410
Inventory	53,690
Plant and equipment (net)	1,21,010
Land	76,865
Total Assets	2,96,030

Liabilities and Stockholders’ Equity
Accounts payable	74,250
Common stock	84,810
Other contributed capital	92,240
Retained earnings	44,730
Total liabilities and stockholders’ equity	2,96,030

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Answer 2

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