111. R Company owed M Company $17,000 on open account on the date of acquisition.Prepare a consolidated balance sheet for M and R Companies on the date of acquisition. Any difference between the value implied bythe purchase price of the investment and the book value of net assets acquired relates to subsidiary land. The book values of RCompany's other assets and liabilities are equal to their fair values. (List assets in order of liquidity.)Show Transcribed TextShow Transcribed TextĆM COMPANY AND SUBSIDIARYConsolidated Balance SheetAssetsLiabilities and Stockholders' Equity$$$$ M Company purchased 80% of the outstanding common stock of R Company on January 2, 2020, for $410,000. Balance sheets for MCompany and R Company immediately after the stock acquisition were as follows:Current assetsInvestment in R CompanyPlant and equipment (net)LandCurrent liabilitiesLong-term notes payableCommon stockOther contributed capitalRetained earningsM Company$174,000410,000650,00048,000$1,282,000$132,000-0-510,000284,000356,000$1,282,000R Company$98,000-0-229,000126,000$453,000$44,00038,000170,00066,000135,000$453,000R Company owed M Company $17,000 on open account on the date of acquisition.

A consolidated balance sheet is basically a document that combines all the financial information of…

M Company purchased 80% of the outstanding common stock of R Company on January 2, 2020, for $410,000. Balance sheets for M Company and R Company immediately after the stock acquisition were as follows: Current assets Investment in R Company Plant and equipment (net) Land M Company $174,000 410,000 650,000 48,000 R Company $98,000 -0- 229,000 126,000

M Company purchased 80% of the outstanding common stock of R Company on January 2, 2020, for $410,000. Balance sheets for M Company and R Company immediately after the stock acquisition were as follows: Current assets Investment in R Company Plant and equipment (net) Land M Company $174,000 410,000 650,000 48,000 R Company $98,000 -0- 229,000 126,000

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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