On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows: Items Park Strand Current assets $ 70,000 $ 20,000 Noncurrent assets 90,000 40,000 Total assets $ 160,000 $ 60,000 Current liabilities $ 30,000 $ 10,000 Long-term debt 50,000 0 Stockholders’ equity 80,000 50,000 Total liabilities and equities $ 160,000 $ 60,000 On January 2, Park borrowed $60,000 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 $60,000 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:
On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows: Items Park Strand Current assets $ 70,000 $ 20,000 Noncurrent assets 90,000 40,000 Total assets $ 160,000 $ 60,000 Current liabilities $ 30,000 $ 10,000 Long-term debt 50,000 0 Stockholders’ equity 80,000 50,000 Total liabilities and equities $ 160,000 $ 60,000 On January 2, Park borrowed $60,000 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 $60,000 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:
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 30BEB: Klynveld Companys balance sheet shows total liabilities of 94,000,000, total stockholders equity of...
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On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows:
| Items | Park | Strand |
|---|---|---|
| Current assets | $ 70,000 | $ 20,000 |
| Noncurrent assets | 90,000 | 40,000 |
| Total assets | $ 160,000 | $ 60,000 |
| Current liabilities | $ 30,000 | $ 10,000 |
| Long-term debt | 50,000 | 0 |
| 80,000 | 50,000 | |
| Total liabilities and equities | $ 160,000 | $ 60,000 |
On January 2, Park borrowed $60,000 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 $60,000 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
Required:
On a consolidated
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