REQUIRED1. Prepare a schedule to assign the difference between the fair value of the investment in Set and the book value of the interest to identifiable and unidentifiable net assets.2. Prepare a consolidated balance sheet for Par Corporation and Subsidiary at January 1, 2011. P 3-2Allocation schedule for fair value/book value differential and consolidated bal-ance sheet at acquisitionPar Corporation acquired 70 percent of the outstanding common stock of Set Corporation on January 1,2011, for $700,000 cash. Immediately after this acquisition, the balance sheet information for the twocompanies was as follows (in thousands):SetPar Book ValueBook ValueFair ValueAssets$ 140320280$ 80120Cash$ 80Receivables-net120Inventories120200200280Land400240360Buildings-netEquipment-netInvestment in Set440320160120700Total assets$2,600$960$1,120Liabilities and Stockholders’ EquityAccounts payableOther liabilities$ 36040$ 320$320200400160Capital stock, $20 parRetained earningsTotal equities2,00020040$2,600$960REQUIRED1. Prepare a schedule to assign the difference between the fair value of the investment in Set and the bookvalue of the interest to identifiable and unidentifiable net assets.2. Prepare a consolidated balance sheet for Par Corporation and Subsidiary at January 1, 2011. PAR AND SET CORPORATIONSP 3-2Consolidated Balance Sheet|Book Value80 |120 |120 |200 |280 |160 |Set|Book ValueParSet|(in thousands)Fair Value140 |320 |280 |400 |440 |320 |Cash40 |60 |100 |120 |180 |Receivables-netInventoriesLandBuildings--netEquipment--net60 |Investment in Set700GoodwillTotal assets2,600960 |560 |320 |200 |400 |Accounts payable360160 |Other liabilities4080 |Capital stockRetained earningsTotal equities2,000 |200402,600960 |Noncontrolling interest

schedule to allocate the difference between the fair value of an investment inset and the book…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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REQUIRED

1. Prepare a schedule to assign the difference between the fair value of the investment in Set and the book value of the interest to identifiable and unidentifiable net assets.

2. Prepare a consolidated balance sheet for Par Corporation and Subsidiary at January 1, 2011.

P 3-2
Allocation schedule for fair value/book value differential and consolidated bal-
ance sheet at acquisition
Par Corporation acquired 70 percent of the outstanding common stock of Set Corporation on January 1,
2011, for $700,000 cash. Immediately after this acquisition, the balance sheet information for the two
companies was as follows (in thousands):
Set
Par Book Value
Book Value
Fair Value
Assets
$ 140
320
280
$ 80
120
Cash
$ 80
Receivables-net
120
Inventories
120
200
200
280
Land
400
240
360
Buildings-net
Equipment-net
Investment in Set
440
320
160
120
700
Total assets
$2,600
$960
$1,120
Liabilities and Stockholders’ Equity
Accounts payable
Other liabilities
$ 360
40
$ 320
$320
200
400
160
Capital stock, $20 par
Retained earnings
Total equities
2,000
200
40
$2,600
$960
REQUIRED
1. Prepare a schedule to assign the difference between the fair value of the investment in Set and the book
value of the interest to identifiable and unidentifiable net assets.
2. Prepare a consolidated balance sheet for Par Corporation and Subsidiary at January 1, 2011.

PAR AND SET CORPORATIONS
P 3-2
Consolidated Balance Sheet
|
Book Value
80 |
120 |
120 |
200 |
280 |
160 |
Set
|
Book Value
Par
Set
|(in thousands)
Fair Value
140 |
320 |
280 |
400 |
440 |
320 |
Cash
40 |
60 |
100 |
120 |
180 |
Receivables-net
Inventories
Land
Buildings--net
Equipment--net
60 |
Investment in Set
700
Goodwill
Total assets
2,600
960 |
560 |
320 |
200 |
400 |
Accounts payable
360
160 |
Other liabilities
40
80 |
Capital stock
Retained earnings
Total equities
2,000 |
200
40
2,600
960 |
Noncontrolling interest

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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