On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows: Items Current assets Noncurrent assets Total assets Current liabilities Long-term debt Stockholders' equity Total liabilities and equities Park $ 74,500 92,250 $ 166,750 $ 32,000 51,750 83,000 Strand $ 16,050 46,200 $ 62,250 $ 12,250 0 50,000 $ 166,750 $ 62,250 On January 2, Park borrowed $66,000 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 $66,000 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: Items Current assets Noncurrent assets Total assets Current liabilities Long-term debt Stockholders' equity Total liabilities and equities Park $ 74,500 92,250 $ 166,750 $ 32,000 51,750 83,000 Strand $ 16,050 46,200 $ 62,250 $ 12,250 0 50,000 $ 166,750 $ 62,250 On January 2, Park borrowed $66,000 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 $66,000 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

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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Question

On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows:
Items
Current assets
Noncurrent assets
Total assets
Current liabilities
Long-term debt
Stockholders' equity
Total liabilities and equities
Park
$ 74,500
92,250
$ 166,750
$ 32,000
51,750
83,000
$166,750
Strand
$ 16,050
46,200
$ 62,250
$ 12,250
0
50,000
$ 62,250
On January 2, Park borrowed $66,000 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 $66,000 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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Step 1: Define the consolidated Balance sheet

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Step 2: Compute current asset

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Step 3: Compute Non-Current Asset

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Step 4: Computation of current liabilities

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Step 5: Compute non-current liabilities

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Step 6: Computation of Stock holder's equity

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