On January 1, 2021, Flint Corporation acquired a 100% equity interest in Cole Corporation.The individual Balance Sheets of each company as well as the consolidated Balance Sheet totals on January 1, 2021 are shown in the table below: Notes Payables -(Short Term)Notes Payables -(Long Term)Common StockRetained EarningsAdditional Paid inCapital in Excess ofPar Value$60,000 $30,000$3,600,000$220,000 $3,820,000$1,000,000 $600,000$300,000 $1,500,000$400,000$90,000$1,000,000$300,000Using the table above, answer the following questions:1. How much consideration did Flint Corporation pay for its 100%equity interest in Cole Corporation?2. What was the fair value of Cole Corporation's inventory onJanuary 1, 2021. Account NameCashAccountsReceivablesPrepaid ExpensesInventoryMachinery andEquipment (NET)ComputerEquipment (NET)TrademarkPatentInvestment in ColeCorporationAccounts PayablesAccrued ExpensesFlintCole ConsolidationCorporation Corporation Amounts$250,000$90,000$750,000$200,000$40,000$40,000$660,000 $700,000 $1,360,000$700,000 $780,000$2,500,000$260,000 $1,010,000$500,000$100,000 $250,000$200,000$40,000$220,000$340,000$50,000$1,480,000$420,000$500,000$350,000$250,000$40,000

Acquirer is the company which purchased the equity stock of the other company and it is also written…

Answered: Notes Payables - (Short Term) Notes…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

On January 1, 2021, Flint Corporation acquired a 100% equity interest in Cole Corporation. The individual Balance Sheets of each company as well as the consolidated Balance Sheet totals on January 1, 2021 are shown in the table below:

Notes Payables -
(Short Term)
Notes Payables -
(Long Term)
Common Stock
Retained Earnings
Additional Paid in
Capital in Excess of
Par Value
$60,000 $30,000
$3,600,000
$220,000 $3,820,000
$1,000,000 $600,000
$300,000 $1,500,000
$400,000
$90,000
$1,000,000
$300,000
Using the table above, answer the following questions:
1. How much consideration did Flint Corporation pay for its 100%
equity interest in Cole Corporation?
2. What was the fair value of Cole Corporation's inventory on
January 1, 2021.

Account Name
Cash
Accounts
Receivables
Prepaid Expenses
Inventory
Machinery and
Equipment (NET)
Computer
Equipment (NET)
Trademark
Patent
Investment in Cole
Corporation
Accounts Payables
Accrued Expenses
Flint
Cole Consolidation
Corporation Corporation Amounts
$250,000
$90,000
$750,000
$200,000
$40,000
$40,000
$660,000 $700,000 $1,360,000
$700,000 $780,000
$2,500,000
$260,000 $1,010,000
$500,000
$100,000 $250,000
$200,000
$40,000
$220,000
$340,000
$50,000
$1,480,000
$420,000
$500,000
$350,000
$250,000
$40,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions