On January 1, 2XX1, Bargain Inc. acquired 100% of Wind Corporation for $9,750,000 cash. On that date, Willey's total stockholders' equity was $7,250,000. The following assets had fair values different from book values. Book Value Fair Value $14,500,000 250,000 6,250,000 Buildings and Land $13,500,000 Other Assets 625,000 Bonds Payable 7,500,000 Required Prepare the [E] and [A] consolidation entries on the date of the acquisition: Debit Credit 9,750,000 0 [A] Cash Equity investment (to record the [E] consolidation entry) Buildings and land Other assets Goodwill V V Bonds payable Cash (to record the [A] consolidation entry) Debit 14,500,000 250,000 4,000,000 0 0 0x 9,750,000 * Credit 0x 0x 0x 6,250,000 x 9,750,000 x

On January 1, 2XX1, Bargain Inc. acquired 100% of Wind Corporation for $9,750,000 cash. On that date, Willey's total stockholders' equity was $7,250,000. The following assets had fair values different from book values. Book Value Fair Value $14,500,000 250,000 6,250,000 Buildings and Land $13,500,000 Other Assets 625,000 Bonds Payable 7,500,000 Required Prepare the [E] and [A] consolidation entries on the date of the acquisition: Debit Credit 9,750,000 0 [A] Cash Equity investment (to record the [E] consolidation entry) Buildings and land Other assets Goodwill V V Bonds payable Cash (to record the [A] consolidation entry) Debit 14,500,000 250,000 4,000,000 0 0 0x 9,750,000 * Credit 0x 0x 0x 6,250,000 x 9,750,000 x

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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