Balance Sheet Worksheet
Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $150,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:
Item | Blank Corporation | Faith Corporation |
Cash | $ 65,000 | $ 18,000 |
Accounts Receivable | 87,000 | 37,000 |
Inventory | 110,000 | 60,000 |
Buildings and Equipment (net) | 220,000 | 150,000 |
Investment in Faith Corporation Stock | 150,000 |
|
Total Assets | $632,000 | $265,000 |
Accounts Payable | $ 92,000 | $ 35,000 |
Notes Payable | 150,000 | 80,000 |
Common Stock | 100,000 | 60,000 |
Retained Earnings | 290,000 | 90,000 |
Total Liabilities and Stockholders’ Equity | $632,000 | $265,000 |
At the date of the business combination, the book values of Faith’s net assets and liabilities approximated fair value. Assume Faith Corporation’s accumulated depreciation on buildings and equipment on the acquisition date was $30,000.
Required
a. Give the eliminating entry or entries needed to prepare a consolidated balance sheet immediately following the business combination.
b. Prepare a consolidated balance sheet worksheet.
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