P 3-5 Prepare a consolidated balance sheet one year after acquisition Adjusted trial balances for Pop and Son Corporations at December 31, 2016, are as follows (in thousands): Pop Son Debits Current assets $ 1,920 $ 800 Plant assets—net 4,000 2,400 Investment in Son 3,360 ----- Cost of sales 2,400 2,400 Other expenses 800 400 Dividends 400 ---- $12,880 $6,000 Credits Liabilities $ 3,600 $ 1,680 Capital stock 2,400 400 Retained earnings 2,720 720 Sales 4,000 3,200 Income from Son 160 ---- $12,880 $6,000 Pop purchased all the stock of Son for $3,200,000 cash on January 1, 2016, when Son’s stockholders’ equity consisted of $400,000 capital stock and $720,000 retained earnings. Son’s assets and liabilities were fairly valued except for inventory that was undervalued by $160,000 and sold in 2016, and plant assets that were undervalued by $320,000 and had a remaining useful life of four years from the date of the acquisition. Required Prepare a consolidated balance sheet for Pop Corporation and Subsidiary at December 31, 2016.
P 3-5 Prepare a consolidated balance sheet one year after acquisition
Adjusted
Pop Son
Debits
Current assets $ 1,920 $ 800
Plant assets—net 4,000 2,400
Investment in Son 3,360 -----
Cost of sales 2,400 2,400
Other expenses 800 400
Dividends 400 ----
$12,880 $6,000
Credits
Liabilities $ 3,600 $ 1,680
Capital stock 2,400 400
Sales 4,000 3,200
Income from Son 160 ----
$12,880 $6,000
Pop purchased all the stock of Son for $3,200,000 cash on January 1, 2016, when Son’s
Required
Prepare a consolidated balance sheet for Pop Corporation and Subsidiary at December 31, 2016.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
