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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
7
![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
Buildings and Land $13,500,000 $14,500,000
Other Assets
625,000
Bonds Payable
7,500,000
Required
Prepare the [E] and [A] consolidation entries on the date of the acquisition:
[E]
Debit
Credit
9,750,000
[A]
Cash
250,000
6,250,000
Equity investment
(to record the [E] consolidation entry)
Buildings and land
Other assets
Goodwill
Bonds payable
Cash
(to record the [A] consolidation entry).
0
Debit
14,500,000
250,000
4,000,000
0
0
0x
9,750,000 x
Credit
0x
0x
0x
6,250,000 *
9,750,000 *](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F24590319-d663-4005-b15a-e6246547767f%2Fecd72f9f-ea17-4b76-b997-859705196de6%2F4t6tp3s_processed.png&w=3840&q=75)
Transcribed Image Text: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
Buildings and Land $13,500,000 $14,500,000
Other Assets
625,000
Bonds Payable
7,500,000
Required
Prepare the [E] and [A] consolidation entries on the date of the acquisition:
[E]
Debit
Credit
9,750,000
[A]
Cash
250,000
6,250,000
Equity investment
(to record the [E] consolidation entry)
Buildings and land
Other assets
Goodwill
Bonds payable
Cash
(to record the [A] consolidation entry).
0
Debit
14,500,000
250,000
4,000,000
0
0
0x
9,750,000 x
Credit
0x
0x
0x
6,250,000 *
9,750,000 *
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