Problem

Consolidated balance sheet workpapers (fair value/book value differentials and noncontroll...

Consolidated balance sheet workpapers (fair value/book value differentials and noncontrolling interest)

Pop Corporation acquired a 70 percent interest in Stu Corporation on January 1, 2011, for $ 1,400,000, when Stu’s stockholders’ equity consisted of $1,000,000 capital stock and $600,000 retained earnings. On this date, the book value of Stu’s assets and liabilities was equal to the fair value, except for inventories that were undervalued by $40,000 and sold in 2011, and plant assets that were undervalued by $160,000 and had a remaining useful life of eight years from January L Stu’s net income and dividends for 2011 were $140,000 and $20,000, respectively.

Separate-company balance sheet information for Pop and Stu Corporations at December 31, 2011, follows (in thousands):

REQUIRED: Prepare consolidated balance sheet workpapers for Pop Corporation and Subsidiary at December 31, 2011.

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Solutions For Problems in Chapter 3