3) On January 1, 2013, Pendal Corporation purchased 25% of the outstanding common stock of Sedda Corporationfor $100,000 cash. Book value and fair value of Sedda's assets and liabilities at the time of acquisition are shownbelow.AssetsBookFairValues$40,000Values$40,000CashAccounts receivable100,00090,00050,000210,000$390,000Inventories40,000Equipment180,000$360,000Liabilities & EquitiesAccounts payableNote payableCapital stockRetained earnings$110,000$110,00050,00040,000100,000100,000$360,000$150,000Required:Prepare an allocation schedule for Pendal's investment in Sedda.

Computation of excess cost over book value acquired: Amount Investment cost $100,000…

3) On January 1, 2013, Pendal Corporation purchased 25% of the outstanding common stock of Sedda Corporation for $100,000 cash. Book value and fair value of Sedda's assets and liabilities at the time of acquisition are shown below. Assets Book Fair Values $40,000 100,000 Values $40,000 90,000 Cash Accounts receivable 50,000 210,000 $390,000 Inventories 40,000 Equipment 180,000 $360,000 Liabilities & Equities Accounts payable Note payable Capital stock Retained earnings $110,000 $110,000 50,000 40,000 100,000 100,000 $360,000 $150,000 Required: Prepare an allocation schedule for Pendal's investment in Sedda.

3) On January 1, 2013, Pendal Corporation purchased 25% of the outstanding common stock of Sedda Corporation for $100,000 cash. Book value and fair value of Sedda's assets and liabilities at the time of acquisition are shown below. Assets Book Fair Values $40,000 100,000 Values $40,000 90,000 Cash Accounts receivable 50,000 210,000 $390,000 Inventories 40,000 Equipment 180,000 $360,000 Liabilities & Equities Accounts payable Note payable Capital stock Retained earnings $110,000 $110,000 50,000 40,000 100,000 100,000 $360,000 $150,000 Required: Prepare an allocation schedule for Pendal's investment in Sedda.

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter16: Advanced Topics Concerning Complex Auditing Judgments

Section: Chapter Questions

Problem 55RSCQ

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

3) On January 1, 2013, Pendal Corporation purchased 25% of the outstanding common stock of Sedda Corporation
for $100,000 cash. Book value and fair value of Sedda's assets and liabilities at the time of acquisition are shown
below.
Assets
Book
Fair
Values
$40,000
Values
$40,000
Cash
Accounts receivable
100,000
90,000
50,000
210,000
$390,000
Inventories
40,000
Equipment
180,000
$360,000
Liabilities & Equities
Accounts payable
Note payable
Capital stock
Retained earnings
$110,000
$110,000
50,000
40,000
100,000
100,000
$360,000
$150,000
Required:
Prepare an allocation schedule for Pendal's investment in Sedda.

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