P 3-2 Allocation schedule for fair value/book value differential and consolidated balance sheet at acquisition Pop Corporation acquired 70 percent of the outstanding common stock of Son Corporation on January 1, 2016, for $350,000 cash. Immediately after this acquisition the balance sheet information for the two companies was as follows (in thousands): Son Pop Book Value Book Value Fair Value Assets Cash $ 70 $ 40 $40 Receivables—net 160 60 60 Inventories 140 60 100 Land 200 100 120 Buildings—net 220 140 180 Equipment—net 160 80 60 Investment in Son 350 Total assets $1,300 $480 $ 560 Liabilities and Stockholders’ Equity Accounts payable $ 180 $160 $160 Other liabilities 20 100 80 Capital stock, $20 par 1,000 200 Retained earnings 100 20 Total equities $1,300 $480 Required Prepare a schedule to assign the difference between the fair value of the investment in Son and the book value of the interest to identifiable and unidentifiable net assets. Prepare a consolidated balance sheet for Pop Corporation and Subsidiary at January 1, 2016.
P 3-2 Allocation schedule for fair value/book value differential and consolidated balance sheet at acquisition
Pop Corporation acquired 70 percent of the outstanding common stock of Son Corporation on January 1, 2016, for $350,000 cash. Immediately after this acquisition the balance sheet information for the two companies was as follows (in thousands):
|
|
|
Son |
|
|---|---|---|---|
|
|
Pop Book Value |
Book Value |
Fair Value |
|
Assets |
|
|
|
|
Cash |
$ 70 |
$ 40 |
$40 |
|
Receivables—net |
160 |
60 |
60 |
|
Inventories |
140 |
60 |
100 |
|
Land |
200 |
100 |
120 |
|
Buildings—net |
220 |
140 |
180 |
|
Equipment—net |
160 |
80 |
60 |
|
Investment in Son |
350 |
|
|
|
Total assets |
$1,300 |
$480 |
$ 560 |
|
Liabilities and |
|
|
|
|
Accounts payable |
$ 180 |
$160 |
$160 |
|
Other liabilities |
20 |
100 |
80 |
|
Capital stock, $20 par |
1,000 |
200 |
|
|
|
100 |
20 |
|
|
Total equities |
$1,300 |
$480 |
|
Required
-
Prepare a schedule to assign the difference between the fair value of the investment in Son and the book value of the interest to identifiable and unidentifiable net assets.
-
Prepare a consolidated balance sheet for Pop Corporation and Subsidiary at January 1, 2016.
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