Petro Incorporated and Sport Company reported summarized balance sheets as shown below, on December 31, 2019. Current assets Noncurrent assets Current liabilities Petro $1,050,000 1,675,000 $575,000 875,000 Sport $525,000 1,075,000 $125,000 375 000 Long-term debt On January 1, 2020, Petro purchased 80% of the outstanding capital stock of Sport for $980,000, of which $230,000 was paid in cash, and $750,000 was borrowed from their bank. The debt is to be repaid in 10 annual installments begr consisting of $75,000 principal, plus accrued interest. The excess fair value of Sport Company over the underlying book value is allocated to inventory (70 percent) and to goodwill (30 percent). ng on December 31, 2020, with each payment Required: Calculate the balance in each of the following accounts, on the consolidated balance sheet, immediately following the acquisition. d. Long-term debt e. Stockholders' equity. a. Current assets b. Noncurrent assets
Petro Incorporated and Sport Company reported summarized balance sheets as shown below, on December 31, 2019. Current assets Noncurrent assets Current liabilities Petro $1,050,000 1,675,000 $575,000 875,000 Sport $525,000 1,075,000 $125,000 375 000 Long-term debt On January 1, 2020, Petro purchased 80% of the outstanding capital stock of Sport for $980,000, of which $230,000 was paid in cash, and $750,000 was borrowed from their bank. The debt is to be repaid in 10 annual installments begr consisting of $75,000 principal, plus accrued interest. The excess fair value of Sport Company over the underlying book value is allocated to inventory (70 percent) and to goodwill (30 percent). ng on December 31, 2020, with each payment Required: Calculate the balance in each of the following accounts, on the consolidated balance sheet, immediately following the acquisition. d. Long-term debt e. Stockholders' equity. a. Current assets b. Noncurrent assets
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![PART C
Petro Incorporated and Sport Company reported summarized balance sheets as shown below,
on December 31, 2019.
Petro
$1,050,000
1,675,000
$575,000
875,000
Sport
$525,000
1,075,000
$125,000
375 000
Current assets
Noncurrent assets
Current liabilities
Long-term debt
On January 1, 2020, Petro purchased 80% of the outstanding capital stock of Sport for $980,000,
of which $230,000 was paid in cash, and $750,000 was borrowed from their bank. The debt is
to be repaid in 10 annual installments beginning on December 31, 2020, with each payment
consisting of $75,000 principal, plus accrued interest.
The excess fair value of Sport Company over the underlying book value is allocated to inventory
(70 percent) and to goodwill (30 percent).
Required: Calculate the balance in each of the following accounts, on the consolidated balance
sheet, immediately following the acquisition.
a. Current assets
b. Noncurrent assets
c. Current liabilities.
d. Long-term debt
e. Stockholders' equity.
[END OF QUESTIONS]
GOOD LUCK](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3bf01e19-b5b2-4e0c-9f96-b6489a00899f%2Fc7f78303-dee5-4b95-8986-ffa8ba7a5d67%2F2wccui_processed.jpeg&w=3840&q=75)
Transcribed Image Text:PART C
Petro Incorporated and Sport Company reported summarized balance sheets as shown below,
on December 31, 2019.
Petro
$1,050,000
1,675,000
$575,000
875,000
Sport
$525,000
1,075,000
$125,000
375 000
Current assets
Noncurrent assets
Current liabilities
Long-term debt
On January 1, 2020, Petro purchased 80% of the outstanding capital stock of Sport for $980,000,
of which $230,000 was paid in cash, and $750,000 was borrowed from their bank. The debt is
to be repaid in 10 annual installments beginning on December 31, 2020, with each payment
consisting of $75,000 principal, plus accrued interest.
The excess fair value of Sport Company over the underlying book value is allocated to inventory
(70 percent) and to goodwill (30 percent).
Required: Calculate the balance in each of the following accounts, on the consolidated balance
sheet, immediately following the acquisition.
a. Current assets
b. Noncurrent assets
c. Current liabilities.
d. Long-term debt
e. Stockholders' equity.
[END OF QUESTIONS]
GOOD LUCK
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