G Company is considering the takeover of K Company whereby it will issue 8,000 common shares for all of the outstanding shares of K Company. K Company will become a wholly owned subsidiary of G Company. Prior to the acquisition, G Company had 15,000 shares outstanding, which were trading at $9.70 per share. The following information has been assembled: Current assets Plant assets (net) Current liabilities Long-term debt Common shares Retained earnings G Company Current assets Carrying Amount $67,500 79,000 $146,500 $ 21,900 24,500 67,000 33,100 $146,500 Fair Value $57,000 89,000 21,900 28,500 K Company G Company $ Carrying Amount $ 29,000 39,000 $ 68,000 $ 6,900 4,400 29,000 27,700 $ 68,000 (b) Prepare G Company's consolidated balance sheet immediately after the combination using the worksheet approach and the acquisition method. (Leave no cells blank - be certain to enter "0" wherever required. Values in the first two columns and last column (the "parent", "subsidiary" and "consolidated" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Entry" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Omit $ sign in your response.) Fair Value $18,700 62,000 6,900 6,900 Consolidated Financial Statement Working Paper G Company Consolidated Balance Sheet K Company $ Dr. $ Entries Cr. $ Consolidated $
G Company is considering the takeover of K Company whereby it will issue 8,000 common shares for all of the outstanding shares of K Company. K Company will become a wholly owned subsidiary of G Company. Prior to the acquisition, G Company had 15,000 shares outstanding, which were trading at $9.70 per share. The following information has been assembled: Current assets Plant assets (net) Current liabilities Long-term debt Common shares Retained earnings G Company Current assets Carrying Amount $67,500 79,000 $146,500 $ 21,900 24,500 67,000 33,100 $146,500 Fair Value $57,000 89,000 21,900 28,500 K Company G Company $ Carrying Amount $ 29,000 39,000 $ 68,000 $ 6,900 4,400 29,000 27,700 $ 68,000 (b) Prepare G Company's consolidated balance sheet immediately after the combination using the worksheet approach and the acquisition method. (Leave no cells blank - be certain to enter "0" wherever required. Values in the first two columns and last column (the "parent", "subsidiary" and "consolidated" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Entry" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Omit $ sign in your response.) Fair Value $18,700 62,000 6,900 6,900 Consolidated Financial Statement Working Paper G Company Consolidated Balance Sheet K Company $ Dr. $ Entries Cr. $ Consolidated $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:G Company is considering the takeover of K Company whereby it will issue 8,000 common shares for all of the outstanding shares of
K Company. K Company will become a wholly owned subsidiary of G Company. Prior to the acquisition, G Company had 15,000 shares
outstanding, which were trading at $9.70 per share. The following information has been assembled:
Current assets
Plant assets (net)
Current liabilities
Long-term debt
Common shares
Retained earnings
Current assets
Plant assets (net)
Goodwill
Investment in K Company
Acquisition differential
Current liabilities
Long-term debt
Common shares
Retained earnings
Carrying
Amount
$67,500
79,000
$146,500
$ 21,900
24,500
67,000
33,100
$146,500
G Company
$
$
Fair Value
$57,000
89,000
$
(b) Prepare G Company's consolidated balance sheet immediately after the combination using the worksheet approach and the
acquisition method. (Leave no cells blank - be certain to enter "0" wherever required. Values in the first two columns and last
column (the "parent", "subsidiary" and "consolidated" balances) that are to be deducted should be indicated with a minus sign,
while all values in the "Entry" columns should be entered as positive values. For accounts where multiple adjusting entries are
required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly,
combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Omit $ sign in your
response.)
G Company
$
21,900
28,500
Carrying
Amount
K Company
$ 29,000
39,000
$ 68,000
$ 6,900
4,400
29,000
27,700
$ 68,000
Consolidated Financial Statement Working Paper
G Company
Consolidated Balance Sheet
K Company
$
$
$
Fair Value
$18,700
62,000
$
6,900
6,900
Total
Dr.
$
$
Entries
Cr.
$
$
Consolidated
$
$
$
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