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Exercise 5-7 (Static) Consolidation with Noncontrolling Interest LO 5-2 Prophet Corporation acquired 75 percent of Seer Corporation's voting common stock on December 31, 20X4, for $390,000. At the date of combination, Seer reported the following: Assets Current Assets Long-Term Assets (net) Total $ 220,000 420,000 $ 640,000 Liabilities Current Liabilities Long-Term Liabilities Common Stock Retained Earnings Total $ 80,000 200,000 120,000 240,000 $ 640,000 At December 31, 20X4, the book values of Seer's net assets and liabilities approximated their fair values, except for buildings, which had a fair value of $80,000 more than book value, and inventories, which had a fair value of $36,000 more than book value. The fair value of the noncontrolling interest was determined to be $130,000 at that date. Required: Prophet Corporation wishes to prepare a consolidated balance sheet immediately following the business combination. Prepare the consolidation entry or entries needed to prepare a consolidated balance sheet at December 31, 20X4. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

Exercise 5-7 (Static) Consolidation with Noncontrolling Interest LO 5-2 Prophet Corporation acquired 75 percent of Seer Corporation's voting common stock on December 31, 20X4, for $390,000. At the date of combination, Seer reported the following: Assets Current Assets Long-Term Assets (net) Total $ 220,000 420,000 $ 640,000 Liabilities Current Liabilities Long-Term Liabilities Common Stock Retained Earnings Total $ 80,000 200,000 120,000 240,000 $ 640,000 At December 31, 20X4, the book values of Seer's net assets and liabilities approximated their fair values, except for buildings, which had a fair value of $80,000 more than book value, and inventories, which had a fair value of $36,000 more than book value. The fair value of the noncontrolling interest was determined to be $130,000 at that date. Required: Prophet Corporation wishes to prepare a consolidated balance sheet immediately following the business combination. Prepare the consolidation entry or entries needed to prepare a consolidated balance sheet at December 31, 20X4. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

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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Exercise 5-7 (Static) Consolidation with Noncontrolling Interest LO 5-2 Prophet Corporation acquired 75 percent of Seer Corporation's voting common stock on December 31, 20X4, for $390,000. At the date of combination, Seer reported the following: Assets Current Assets Long-Term Assets (net) Total view transaction list Consolidation Worksheet Entries $ 220,000 420,000 A $ 640,000 At December 31, 20X4, the book values of Seer's net assets and liabilities approximated their fair values, except for buildings, which had a fair value of $80,000 more than book value, and inventories, which had a fair value of $36,000 more than book value. The fair value of the noncontrolling interest was determined to be $130,000 at that date. B Liabilities Current Liabilities Long-Term Liabilities Common Stock Retained Earnings Total Required: Prophet Corporation wishes to prepare a consolidated balance sheet immediately following the business combination. Prepare the consolidation entry or entries needed to prepare a consolidated balance sheet at December 31, 20X4. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. $ 80,000 200,000 120,000 240,000 $ 640,000 Record the excess value (differential) reclassification entry.
Transcribed Image Text:Exercise 5-7 (Static) Consolidation with Noncontrolling Interest LO 5-2 Prophet Corporation acquired 75 percent of Seer Corporation's voting common stock on December 31, 20X4, for $390,000. At the date of combination, Seer reported the following: Assets Current Assets Long-Term Assets (net) Total view transaction list Consolidation Worksheet Entries $ 220,000 420,000 A $ 640,000 At December 31, 20X4, the book values of Seer's net assets and liabilities approximated their fair values, except for buildings, which had a fair value of $80,000 more than book value, and inventories, which had a fair value of $36,000 more than book value. The fair value of the noncontrolling interest was determined to be $130,000 at that date. B Liabilities Current Liabilities Long-Term Liabilities Common Stock Retained Earnings Total Required: Prophet Corporation wishes to prepare a consolidated balance sheet immediately following the business combination. Prepare the consolidation entry or entries needed to prepare a consolidated balance sheet at December 31, 20X4. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. $ 80,000 200,000 120,000 240,000 $ 640,000 Record the excess value (differential) reclassification entry.
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