Question

Check my work Gamble Company convinced Conservative Corporation that the two companies should establish Simpletown Corporation to build a new gambling casino in Simpletown Corner. Although chances for the casino's success were relatively low, a local bank loaned $140,500,000 to the new corporation, which built the casino at a cost of $130,500,000. Conservative purchased 100 percent of the initial capital stock offering for $5,760,000, and Gamble agreed to supply 100 percent of the management which would include directing Simpletown's day-to-day activities, Gamble also agreed to guarantee the bank loan. Additionally, Gamble guaranteed a 20 percent return to Conservative on its investment for the first 10 years. Gamble will receive all profits in excess of the 20 percent return to Conservative. Immediately after the casino's construction, Gamble reported the following amounts: Cash Buildings and Equipment Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings $ 3,040,000 242,100,000 10,640,000 4,860,000 20, 200,000 101,300,000 188,740,000 es The only disclosure that Gamble currently provides in its financial reports about its relationships to Conservative and Simpletown is a brief footnote indicating that a contingent liability exists on its guarantee of Simpletown Corporation's debt. Required: Prepare a consolidated balance sheet for Gamble immediately following the casino's construction (Amounts to be deducted should be indicated by a minus sign.) GAMBLE COMPANY Consolidated Balance Sheet Assets Total Assets Liabilities and Stockholders' Equity < Prev 3 of 6 !! Next >

Answer 1

Answer:

Assets :
Cash		18,800,000
Buidings and Equipments	372,600,000
Less: Accumulated Depreciation	-10,040,000	362,560,000
Total Assets			381,360,000
Liabilities :
Accounts Payable		4,860,000
Bonds Payable		20,200,000
Banks Notes Payable		140,500,000
Non Controlling Interest		5,760,000
Equity:
Common Stock	101,300,000
Add: Retained Earnings	108,740,000	210,040,000
Total Equity & Liabilities			381,360,000

Workings:

Cash	18,800,000	3,040,000+5,760,000+(140,500,000-130,500,000)
Buidings and Equipments	372,600,000	242,100,000+130,500,000