Saud Corporation acquired 70% of Rama Corporation’s common stock on 1-1-2019, for $294,000 in cash. At...
Saud Corporation acquired 70% of Rama Corporation’s common stock on 1-1-2019, for $294,000 in cash. At the acquisition date, the book values and fair values of Rama’s assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 30% of the total book value of Rama. The stockholders’ equity of the two companies at the date of the purchase are:
Saud Rama
Common stock ($10 par value) $400,000 $180,000
Additional paid-in capital 222,000 65,000
Retained Earnings 358,000 175,000
Total Stockholders’ Equity $980,000 $420,000
Prepare the stockholders' equity section of Saud and Rama consolidated balance sheet as of 1-1, 2019.
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Saud Corporation acquired 70% of Rama Corporation’s common stock
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