On January 1, 2016, Parent Company purchased 100% of the common stock of Subsidiary Company for $320,000. On this date, Subsidiary had total owners' equity of $240,000. On January 1, 2016, the excess of cost over book value is due to a $15,000 undervaluation of inventory, to a $5,000 overvaluation of Bonds Payable, and to an undervaluation of land, building and equipment. The fair value of land is $50,000. The fair value of building and equipment is $200,000. The book value of the land is $30,000. The book value of the building and equipment is $180,000. Required: a. Using the information above and on the separate worksheet, complete a value analysis schedule b. Complete schedule for determination and distribution of the excess of cost over book value c. Complete the worksheet for a consolidated balance sheet as of January 1, 2016

On January 1, 2016, Parent Company purchased 100% of the common stock of Subsidiary Company for $320,000. On this date, Subsidiary had total owners' equity of $240,000. On January 1, 2016, the excess of cost over book value is due to a $15,000 undervaluation of inventory, to a $5,000 overvaluation of Bonds Payable, and to an undervaluation of land, building and equipment. The fair value of land is $50,000. The fair value of building and equipment is $200,000. The book value of the land is $30,000. The book value of the building and equipment is $180,000. Required: a. Using the information above and on the separate worksheet, complete a value analysis schedule b. Complete schedule for determination and distribution of the excess of cost over book value c. Complete the worksheet for a consolidated balance sheet as of January 1, 2016

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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