Powder Company spent $240,000 to acquire all of Sawmill Corporation's stock on January 1, 20X2. The balance sheets of the twocompanies on December 31, 20X3, showed the following amounts:CashAccounts ReceivableLandBuildings and EquipmentLess: Accumulated DepreciationInvestment in Sawmill CorporationAccounts PayableTaxes PayableNotes PayableCommon StockRetained EarningsPowderCompany$ 30,000100,00060,000500,000(230,000)252,000$ 712,000$ 80,00040,000100,000200,000292,000$ 712,000SawmillCorporation$ 20,00040,00050,000350,000(75,000)$ 385,000$ 10,00070,00085,000100,000120,000$ 385,000Sawmill reported retained earnings of $100,000 at the date of acquisition. The difference between the acquisition price and underlyingbook value is assigned to buildings and equipment with a remaining economic life of 10 years from the date of acquisition. AssumeSawmill's accumulated depreciation on the acquisition date was $25,000.Required:a. Prepare the appropriate consolidation entry or entries needed to prepare a consolidated balance sheet as of December 31, 20X3.

Name: Powder Company spent $240,000 to acquire all of Sawmill Corporation's
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Description: Powder Company spent $240,000 to acquire all of Sawmill Corporation's stock on January 1, 20X2. The balance sheets of the twocompanies on December 31, 20X3, showed the following amounts:CashAccounts ReceivableLandBuildings and EquipmentLess: Accumul

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Powder Company spent $240,000 to acquire all of Sawmill Corporation's stock on January 1, 20X2. The balance sheets of the two companies on December 31, 20X3, showed the following amounts: Cash Accounts Receivable Land Buildings and Equipment Less: Accumulated Depreciation Investment in Sawmill Corporation Accounts Payable Taxes Payable Notes Payable Common Stock Retained Earnings. Powder Sawmill Company Corporation $ 30,000 $ 20,000 100,000 40,000 60,000 50,000 500,000 350,000 (230,000) (75,000) H 252,000 $ 712,000 $385,000 $ 80,000 $ 10,000 40,000 70,000 100,000 85,000 200,000 100,000 292,000 $ 712,000 120,000 $ 385,000

Powder Company spent $240,000 to acquire all of Sawmill Corporation's stock on January 1, 20X2. The balance sheets of the two companies on December 31, 20X3, showed the following amounts: Cash Accounts Receivable Land Buildings and Equipment Less: Accumulated Depreciation Investment in Sawmill Corporation Accounts Payable Taxes Payable Notes Payable Common Stock Retained Earnings. Powder Sawmill Company Corporation $ 30,000 $ 20,000 100,000 40,000 60,000 50,000 500,000 350,000 (230,000) (75,000) H 252,000 $ 712,000 $385,000 $ 80,000 $ 10,000 40,000 70,000 100,000 85,000 200,000 100,000 292,000 $ 712,000 120,000 $ 385,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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