Phelps Corporation owns all of the common stock of Stern Company. Each company maintains its own accounting records and prepares separate financial statements. Balance sheets for each company as of December 31, 20Y8, are as follows: Line Item Description Phelps Corporation Stern Company Assets Cash 30,500 20,500 Accounts Receivable 29,100 20,000 Inventory 80,000 35,250 Investment in Stern Company 85,750 — Other assets 300,000 40,000 Total assets 525,350 115,750 Liabilities and Stockholders’ Equity Accounts Payable 80,000 30,000 Common Stock 300,000 50,000 Retained Earnings 145,350 35,750 Total liabilities and stockholders’ equity 525,350 115,750 Prepare a December 31, 20Y8, consolidated balance for Phelps Corporation and Subsidiary.
Phelps Corporation owns all of the common stock of Stern Company. Each company maintains its own accounting records and prepares separate financial statements. Balance sheets for each company as of December 31, 20Y8, are as follows: Line Item Description Phelps Corporation Stern Company Assets Cash 30,500 20,500 Accounts Receivable 29,100 20,000 Inventory 80,000 35,250 Investment in Stern Company 85,750 — Other assets 300,000 40,000 Total assets 525,350 115,750 Liabilities and Stockholders’ Equity Accounts Payable 80,000 30,000 Common Stock 300,000 50,000 Retained Earnings 145,350 35,750 Total liabilities and stockholders’ equity 525,350 115,750 Prepare a December 31, 20Y8, consolidated balance for Phelps Corporation and Subsidiary.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Phelps Corporation owns all of the common stock of Stern Company. Each company maintains its own accounting records and prepares separate financial statements.
| Line Item Description | Phelps Corporation |
Stern Company |
|---|---|---|
| Assets | ||
| Cash | 30,500 | 20,500 |
| 29,100 | 20,000 | |
| Inventory | 80,000 | 35,250 |
| Investment in Stern Company | 85,750 | — |
| Other assets | 300,000 | 40,000 |
| Total assets | 525,350 | 115,750 |
| Liabilities and |
||
| Accounts Payable | 80,000 | 30,000 |
| Common Stock | 300,000 | 50,000 |
| 145,350 | 35,750 | |
| Total liabilities and stockholders’ equity | 525,350 | 115,750 |
Prepare a December 31, 20Y8, consolidated balance for Phelps Corporation and Subsidiary.
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