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$1,230,000 None of the options is correct

$1,230,000 None of the options is correct

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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The consolidated balance sheet for P and S Companies on the date of acquisition will include: * Total Assets of $1,190,000 Total Liabilities and Equity of 1,255,000 Total Assets of $1,280,000 Total Liabilities and Equity of $1,230,000 None of the options is correct
Transcribed Image Text:The consolidated balance sheet for P and S Companies on the date of acquisition will include: * Total Assets of $1,190,000 Total Liabilities and Equity of 1,255,000 Total Assets of $1,280,000 Total Liabilities and Equity of $1,230,000 None of the options is correct
P Company purchased 80% of the outstanding common stock of S Company on January 2, 2011, for $360,000. And any difference between the value implied by the purchase price of the investment and the book value of net assets acquired relates to subsidiary land. The book values of S Company's other assets and liabilities are equal to their fair values. Balance sheets for P Company and S Company immediately after the stock acquisition were as follows: P Company $ 166,000 S Company S 80,000 Current assets Investment in S Company Plant and equipment (net) 360,000 -0- 560,000 224,000 Land 40,000 120,000 Total $1.126,000 $424,000 $ 100,000 $ 28,000 Current liabilities Long-term notes payable Common stock -0- 36,000 480,000 160,000 Other contributed capita Retained earnings 244,000 64,000 302,000 136,000 $424,000 Total $1.126,000
Transcribed Image Text:P Company purchased 80% of the outstanding common stock of S Company on January 2, 2011, for $360,000. And any difference between the value implied by the purchase price of the investment and the book value of net assets acquired relates to subsidiary land. The book values of S Company's other assets and liabilities are equal to their fair values. Balance sheets for P Company and S Company immediately after the stock acquisition were as follows: P Company $ 166,000 S Company S 80,000 Current assets Investment in S Company Plant and equipment (net) 360,000 -0- 560,000 224,000 Land 40,000 120,000 Total $1.126,000 $424,000 $ 100,000 $ 28,000 Current liabilities Long-term notes payable Common stock -0- 36,000 480,000 160,000 Other contributed capita Retained earnings 244,000 64,000 302,000 136,000 $424,000 Total $1.126,000
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