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On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows: Current assets Items Noncurrent assets Total assets Current liabilities Long-term debt Stockholders' equity Total liabilities and equities Park $ 92,500 114,500 $ 207,000 $ 44,000 64,000 99,000 Strand $ 31,050 49,700 $ 80,750 $ 30,750 50,000 $ 207,000 $ 80,750 On January 2, Park borrowed $58,400 and used the proceeds to obtain 80 percent of the outstanding common shares of Strand. The acquisition price was considered proportionate to Strand's total fair value. The $58,400 debt is payable in 10 equal annual principal payments, plus interest, beginning December 31. The excess fair value of the investment over the underlying book value of the acquired net assets is allocated to inventory (60 percent) and to goodwill (40 percent). Required: On a consolidated balance sheet as of January 2, calculate the amounts for each of the following: a. Current assets b. Noncurrent assets c. Current liabilities d. Noncurrent liabilities e. Stockholders' equity

On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows: Current assets Items Noncurrent assets Total assets Current liabilities Long-term debt Stockholders' equity Total liabilities and equities Park $ 92,500 114,500 $ 207,000 $ 44,000 64,000 99,000 Strand $ 31,050 49,700 $ 80,750 $ 30,750 50,000 $ 207,000 $ 80,750 On January 2, Park borrowed $58,400 and used the proceeds to obtain 80 percent of the outstanding common shares of Strand. The acquisition price was considered proportionate to Strand's total fair value. The $58,400 debt is payable in 10 equal annual principal payments, plus interest, beginning December 31. The excess fair value of the investment over the underlying book value of the acquired net assets is allocated to inventory (60 percent) and to goodwill (40 percent). Required: On a consolidated balance sheet as of January 2, calculate the amounts for each of the following: a. Current assets b. Noncurrent assets c. Current liabilities d. Noncurrent liabilities e. Stockholders' equity

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 49E
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On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows: Current assets Items Noncurrent assets Total assets Current liabilities Long-term debt Stockholders' equity Total liabilities and equities Park $ 92,500 114,500 $ 207,000 $ 44,000 64,000 99,000 Strand $ 31,050 49,700 $ 80,750 $ 30,750 50,000 $ 207,000 $ 80,750 On January 2, Park borrowed $58,400 and used the proceeds to obtain 80 percent of the outstanding common shares of Strand. The acquisition price was considered proportionate to Strand's total fair value. The $58,400 debt is payable in 10 equal annual principal payments, plus interest, beginning December 31. The excess fair value of the investment over the underlying book value of the acquired net assets is allocated to inventory (60 percent) and to goodwill (40 percent). Required: On a consolidated balance sheet as of January 2, calculate the amounts for each of the following: a. Current assets b. Noncurrent assets c. Current liabilities d. Noncurrent liabilities e. Stockholders' equity
Transcribed Image Text:On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows: Current assets Items Noncurrent assets Total assets Current liabilities Long-term debt Stockholders' equity Total liabilities and equities Park $ 92,500 114,500 $ 207,000 $ 44,000 64,000 99,000 Strand $ 31,050 49,700 $ 80,750 $ 30,750 50,000 $ 207,000 $ 80,750 On January 2, Park borrowed $58,400 and used the proceeds to obtain 80 percent of the outstanding common shares of Strand. The acquisition price was considered proportionate to Strand's total fair value. The $58,400 debt is payable in 10 equal annual principal payments, plus interest, beginning December 31. The excess fair value of the investment over the underlying book value of the acquired net assets is allocated to inventory (60 percent) and to goodwill (40 percent). Required: On a consolidated balance sheet as of January 2, calculate the amounts for each of the following: a. Current assets b. Noncurrent assets c. Current liabilities d. Noncurrent liabilities e. Stockholders' equity
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