L Company purchased 80% of the outstanding common stock of E Company on January 2, 2020, for $380,000. Balance sheets for L Company and E Company immediately after the stock acquisition were as follows: L Company E Company Current assets $162,000 $105,000 Investment in E Company 380,000 -0- Plant and equipment (net) 565,000 232,000 Land 42,000 136,000 $1,149,000 $473,000 Current liabilities $120,000 $58,000 Long-term notes payable -0- 34,000 Common stock 580,000 160,000 Other contributed capital 304,000 60,000 Retained earnings 145,000 161,000 $1,149,000 $473,000 E Company owed L Company $16,000 on open account on the date of acquisition. Prepare a consolidated balance sheet for L and E Companies on the date of acquisition. Any difference between the value implied by the purchase price of the investment and the book value of net assets acquired relates to subsidiary land. The book values of E

L Company purchased 80% of the outstanding common stock of E Company on January 2, 2020, for $380,000. Balance sheets for L Company and E Company immediately after the stock acquisition were as follows: L Company E Company Current assets $162,000 $105,000 Investment in E Company 380,000 -0- Plant and equipment (net) 565,000 232,000 Land 42,000 136,000 $1,149,000 $473,000 Current liabilities $120,000 $58,000 Long-term notes payable -0- 34,000 Common stock 580,000 160,000 Other contributed capital 304,000 60,000 Retained earnings 145,000 161,000 $1,149,000 $473,000 E Company owed L Company $16,000 on open account on the date of acquisition. Prepare a consolidated balance sheet for L and E Companies on the date of acquisition. Any difference between the value implied by the purchase price of the investment and the book value of net assets acquired relates to subsidiary land. The book values of E

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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