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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 a

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 a

FINANCIAL ACCOUNTING
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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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.
Transcribed Image Text: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
Transcribed Image Text: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
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