Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the date of acquisition, Scrub Company reported assets and liabilities with book values of $424,000 and $169,000, respectively, common stock outstanding of $90,000, and retained earnings of $165,000. The book values and fair values of Scrub's assets and liabilities were identical excep land, which had increased in value by $20,000, and inventories, which had decreased by $10,000. Required: a. Prepare the following consolidation entries required to prepare a consolidated balance sheet immediately after the business combination assuming Power acquired its ownership of Scrub for $280,000. (If no entry is required for a transaction/event, sele "No journal entry required" in the first account field.) Answer is not complete.
Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the date of acquisition, Scrub Company reported assets and liabilities with book values of $424,000 and $169,000, respectively, common stock outstanding of $90,000, and retained earnings of $165,000. The book values and fair values of Scrub's assets and liabilities were identical excep land, which had increased in value by $20,000, and inventories, which had decreased by $10,000. Required: a. Prepare the following consolidation entries required to prepare a consolidated balance sheet immediately after the business combination assuming Power acquired its ownership of Scrub for $280,000. (If no entry is required for a transaction/event, sele "No journal entry required" in the first account field.) Answer is not complete.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 30E
Related questions
Question
![b. Prepare the following consolidation entries required to prepare a consolidated balance sheet immediately after the business
combination assuming Power acquired its ownership of Scrub for $251,000. (If no entry is required for a transaction/event, sel
"No journal entry required" in the first account field.)
No
A
B
Event
1
2
Answer is not complete.
Accounts
Retained earnings
Common stock
Investment in Scrub Company
Land
Goodwill
Inventories
Investment in Scrub Company
XX
Debit
165,000
90,000
20,000
15,000
Credit
255,000
10,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb513605f-3b24-4055-8970-73d38e831acc%2F812a44fd-0bad-452f-a1d9-f3a0d57aee6f%2Fluzlflu_processed.png&w=3840&q=75)
Transcribed Image Text:b. Prepare the following consolidation entries required to prepare a consolidated balance sheet immediately after the business
combination assuming Power acquired its ownership of Scrub for $251,000. (If no entry is required for a transaction/event, sel
"No journal entry required" in the first account field.)
No
A
B
Event
1
2
Answer is not complete.
Accounts
Retained earnings
Common stock
Investment in Scrub Company
Land
Goodwill
Inventories
Investment in Scrub Company
XX
Debit
165,000
90,000
20,000
15,000
Credit
255,000
10,000
![P4-30 Acquisition at Other than Fair Value of Net Assets LO 4-3, 4-4
Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the date of acquisition, Scrub
Company reported assets and liabilities with book values of $424,000 and $169,000, respectively, common stock outstanding of
$90,000, and retained earnings of $165,000. The book values and fair values of Scrub's assets and liabilities were identical except
land, which had increased in value by $20,000, and inventories, which had decreased by $10,000.
Required:
a. Prepare the following consolidation entries required to prepare a consolidated balance sheet immediately after the business
combination assuming Power acquired its ownership of Scrub for $280,000. (If no entry is required for a transaction/event, select
"No journal entry required" in the first account field.)
No
A
B
Event
1
2
Answer is not complete.
Land
Goodwill
Accounts
Common stock
Retained earnings
Investment in Scrub Company
Debit
90,000
165,000
20,000
Credit
255,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb513605f-3b24-4055-8970-73d38e831acc%2F812a44fd-0bad-452f-a1d9-f3a0d57aee6f%2F200alwk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:P4-30 Acquisition at Other than Fair Value of Net Assets LO 4-3, 4-4
Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the date of acquisition, Scrub
Company reported assets and liabilities with book values of $424,000 and $169,000, respectively, common stock outstanding of
$90,000, and retained earnings of $165,000. The book values and fair values of Scrub's assets and liabilities were identical except
land, which had increased in value by $20,000, and inventories, which had decreased by $10,000.
Required:
a. Prepare the following consolidation entries required to prepare a consolidated balance sheet immediately after the business
combination assuming Power acquired its ownership of Scrub for $280,000. (If no entry is required for a transaction/event, select
"No journal entry required" in the first account field.)
No
A
B
Event
1
2
Answer is not complete.
Land
Goodwill
Accounts
Common stock
Retained earnings
Investment in Scrub Company
Debit
90,000
165,000
20,000
Credit
255,000
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