On January 1, 20X3, Parade Corporation reported total assets of $461,000, liabilities of $275,000, and stockholders’...
On January 1, 20X3, Parade Corporation reported total assets of
$461,000, liabilities of $275,000, and stockholders’ equity of
$186,000. At that date, Summer Corporation reported total assets of
$187,000, liabilities of $132,000, and stockholders’ equity of
$55,000. Following lengthy negotiations, Parade paid Summer’s
existing shareholders $44,000 in cash for 80 percent of the voting
common shares of Summer.
Required:
Immediately after Parade purchased the Summer shares
d. What amount of stockholders’ equity was reported in the
consolidated balance sheet?
Homework Answers
Answer:
Computation of stockholder's equity reported in the consolidated balance sheet
| Particulars | Amount | Amount |
| Acquision Price | $44,000 | |
| Percentage acquired | 80% | |
| Total Fair Value of the net assets of the Summer Corporation [$44,000/80%] | $55,000 | |
| Non-Controlling interest of summer corporation [$55,000-$44,000] | $11,000 | |
| Parade Corporation's stockholder's equity | $186,000 | |
| Total consolidated stockholder's equity | $197,000 | |
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