Joey Legoria Corporation Company Cash and Receivables $57,000 $30,000 Inventory 160,000 350,000 BLD/Equipment (net) $435,000 $80,000 Investment in Legoria Stock 230,000 Total Assets $877,000 $460,000 Current Liabilities $115,000 $110,000 Long-Term Debt 425,000 200,000 Common Stock 100,000 100,000 APIC 105,000 40,000 Retained Earnings 137,000 10,000 Total Liabilities and Equity $877,000 $460,000 Joey Corporation acquired 100 percent of Legoria Company’s common stock on January 1, 2022, for $230,000. Balance sheet data for Joey and Legoria on January 1, 2022, are presented above. At the date of the business combination, Legoria’s cash and receivables had a fair value of $28,000, inventory had a fair value of $357,000, and buildings and equipment had a fair value of $92,000. Current Liabilities of Legoria Co had a fair value of $115,000. Required: 1). Give all the Consolidation [Elimination entries] needed to prepare a Consolidated Balance Sheet as of January 1, 2022.
Joey Legoria
Corporation Company
Cash and Receivables $57,000 $30,000
Inventory 160,000 350,000
BLD/Equipment (net) $435,000 $80,000
Investment in Legoria Stock 230,000
Total Assets $877,000 $460,000
Current Liabilities $115,000 $110,000
Long-Term Debt 425,000 200,000
Common Stock 100,000 100,000
APIC 105,000 40,000
Total Liabilities and Equity $877,000 $460,000
Joey Corporation acquired 100 percent of Legoria Company’s common stock on January 1, 2022, for $230,000.
Required:
1). Give all the Consolidation [Elimination entries] needed to prepare a Consolidated Balance Sheet as of January 1, 2022.
2) Compare and contrast your work from HW Problem 3 and HW Problem 4. Why are Consolidation entries needed in this problem and not for Problem 3?
3). Complete a Consolidated Balance Sheet Worksheet in good form.
4) Why would there not be the need to consolidate any of Legoria’s Income Statement on January 1, 2022?
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