Computation of Consolidated Balances
Astor Corporation’s balance sheet at January 1, 20X7, reflected the following balances:
Cash and Receivables | $ 80,000 | Accounts Payable | $ 40,000 |
Inventory | 120,000 | Income Taxes Payable | 60,000 |
Land | 70,000 | Bonds Payable | 200,000 |
Buildings and Equipment (net) | 480,000 | Common Stock | 250,000 |
|
| Retained Earnings | 200,000 |
Total Assets | $750,000 | Total Liabilities and Stockholders’ Equity | $750,000 |
Phel Corporation, which had just entered into an active acquisition program, acquired 100 percent of Astor’s common stock on January 2, 20X7, for $576,000. A careful review of the fair value of Astor’s assets and liabilities indicated the following:
| Book Value | Fair Value |
Inventory | $120,000 | $140,000 |
Land | 70,000 | 60,000 |
Buildings and Equipment (net) | 480,000 | 550,000 |
Required
Compute the appropriate amount to be included in the consolidated balance sheet immediately following the acquisition for each of the following items:
a.Inventory.
b.Land.
c.Buildings and Equipment (net).
d.Goodwill.
e.Investment in Astor Corporation.
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