Question 3:On June 10, 20X8, Tower Corporation acquired 100 percent of Brown Company's common stock.Summarized balance sheet data for the two companies immediately after the stock acquisition are asfollows:ItemCashAccounts ReceivableInventoryBuildings & Equipment (net)Investment in Brown StockTotalAccounts PayableBonds PayableCommon StockRetained EarningsTotalTower Corp.$ 15,00030,00080,000120,000100,000$345,000$ 25,000150,00055,000115,000$345,000Brown CompanyBook Value$ 5,00010,00020,00050,000$85,000$3,00025,00020,00037,000$85,000Fair Value$5,00010,00025,00070,000$110,000$3,00025,000$ 28,000Required:Give the consolidation entries required to prepare a consolidated balance sheet immediatelyafter the acquisition of Brown Company shares. Worksheet is not required.

On June 10, 20X8, Tower Corporation acquired 100 percent of Brown Company's common stock. Summarized balance sheet data for the two companies immediately after the stock acquisition are as follows: Item Cash Accounts Receivable Inventory Buildings & Equipment (net) Investment in Brown Stock Total Tower Corp. $ 15,000 30,000 80,000 120,000 100,000 $345,000 Brown Company Book Value $5,000 10,000 20,000 50,000 $85,000 Fair Value $5,000 10,000 25,000 70,000 $110,000

On June 10, 20X8, Tower Corporation acquired 100 percent of Brown Company's common stock. Summarized balance sheet data for the two companies immediately after the stock acquisition are as follows: Item Cash Accounts Receivable Inventory Buildings & Equipment (net) Investment in Brown Stock Total Tower Corp. $ 15,000 30,000 80,000 120,000 100,000 $345,000 Brown Company Book Value $5,000 10,000 20,000 50,000 $85,000 Fair Value $5,000 10,000 25,000 70,000 $110,000

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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