E Company purchased 80% of the outstanding common stock of P Company on January 2, 2020, for $390,000. Balance sheets for E Company and P Company immediately after the stock acquisition were as follows: Current assets Investment in P Company Plant and equipment (net) Land Current liabilities Long-term notes payable Common stock Other contributed capital Retained earnings E Company $166,000 390,000 560,000 48,000 $1,164,000 $124,000 -0- 510,000 340,000 190,000 $1,164,000 P Company $95,000 -0- 228,000 131,000 $454,000 $44,000 31,000 180,000 64,000 135,000 $454,000 P Company owed E Company $22,000 on open account on the date of acquisition. Prepare a consolidated balance sheet for E and P Companies on the date of acquisition. Any difference between the value implie the purchase price of the investment and the book value of net assets acquired relates to subsidiary land. The book values of P Company's other assets and liabilities are equal to their fair values. (List assets in order of liquidity.)

E Company purchased 80% of the outstanding common stock of P Company on January 2, 2020, for $390,000. Balance sheets for E Company and P Company immediately after the stock acquisition were as follows: Current assets Investment in P Company Plant and equipment (net) Land Current liabilities Long-term notes payable Common stock Other contributed capital Retained earnings E Company $166,000 390,000 560,000 48,000 $1,164,000 $124,000 -0- 510,000 340,000 190,000 $1,164,000 P Company $95,000 -0- 228,000 131,000 $454,000 $44,000 31,000 180,000 64,000 135,000 $454,000 P Company owed E Company $22,000 on open account on the date of acquisition. Prepare a consolidated balance sheet for E and P Companies on the date of acquisition. Any difference between the value implie the purchase price of the investment and the book value of net assets acquired relates to subsidiary land. The book values of P Company's other assets and liabilities are equal to their fair values. (List assets in order of liquidity.)

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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