Exercise 5-6 (Static) Majority-Owned Subsidiary Acquired at Higher than Book Value LO 5-2 Professor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20X4, for $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation Investment in Scholar Corporation Total Assets Accounts Payable Mortgage Payable Common Sto Retained Earnings Total Liabilities & Stockholders' Equity view transaction list Consolidation Worksheet Entries A Professor Corporation $50,300 C 90,000 130,000 60,000 410,000 (150,000) 102,200 $692,500 D $152,500 250,000 0,000 210,000 $ 692,500 At the date of the business combination, the book values of Scholar's assets and liabilities approximated fair value except for Inventory, which had a fair value of $81,000, and buildings and equipment, which had a fair value of $185,000. At December 31, 20X4, Professor reported accounts payable of $12,500 to Scholar, which reported an equal amount in its accounts receivable. Scholar Corporation $ 21,000 44,000 75,000 Required: a. Record the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. 30,000 250,000 (80,000) $340,000 $ 35,000 180,000 85,000 $340,000
Exercise 5-6 (Static) Majority-Owned Subsidiary Acquired at Higher than Book Value LO 5-2 Professor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20X4, for $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Cash Accounts Receivable Inventory Land Buildings & Equipment Less: Accumulated Depreciation Investment in Scholar Corporation Total Assets Accounts Payable Mortgage Payable Common Sto Retained Earnings Total Liabilities & Stockholders' Equity view transaction list Consolidation Worksheet Entries A Professor Corporation $50,300 C 90,000 130,000 60,000 410,000 (150,000) 102,200 $692,500 D $152,500 250,000 0,000 210,000 $ 692,500 At the date of the business combination, the book values of Scholar's assets and liabilities approximated fair value except for Inventory, which had a fair value of $81,000, and buildings and equipment, which had a fair value of $185,000. At December 31, 20X4, Professor reported accounts payable of $12,500 to Scholar, which reported an equal amount in its accounts receivable. Scholar Corporation $ 21,000 44,000 75,000 Required: a. Record the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. 30,000 250,000 (80,000) $340,000 $ 35,000 180,000 85,000 $340,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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