Professor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20X4, fr $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies Included the following amounts as of the date of acquisition: Iten Cash Accounts Receivable. Inventory Land Buildings & Equipment Less: Accumulated Depreciation, Investment in Scholar Corporation Total Assets Accounts Payable Mortgage Payable Common Stock Retained Earnings Total Liabilities & Stockholders' Equity Professor Corporation Scholar Corporation 50,300 $21,000 90,000 44,000 130,000 75,000 60,000 30,000 410,000 250,000 (150,000) (80,000) 102,200 $ 692,500 $340,000 $ 152,500 $ 35,000 250,000 180,000 80,000 40,000 210,000 85,000 692,500 $340,000 At the date of the business combination, the book values of Scholar's assets and liabilities approximated fair value except for Inventory, which had a fair value of $81,000, and buildings and equipment, which had a fair value of $185,000. At December 31, 20X4, Professor reported accounts payable of $12,500 to Scholar, which reported an equal amount in its accounts receivable. Required: a. Record the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Professor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20X4, fr $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies Included the following amounts as of the date of acquisition: Iten Cash Accounts Receivable. Inventory Land Buildings & Equipment Less: Accumulated Depreciation, Investment in Scholar Corporation Total Assets Accounts Payable Mortgage Payable Common Stock Retained Earnings Total Liabilities & Stockholders' Equity Professor Corporation Scholar Corporation 50,300 $21,000 90,000 44,000 130,000 75,000 60,000 30,000 410,000 250,000 (150,000) (80,000) 102,200 $ 692,500 $340,000 $ 152,500 $ 35,000 250,000 180,000 80,000 40,000 210,000 85,000 692,500 $340,000 At the date of the business combination, the book values of Scholar's assets and liabilities approximated fair value except for Inventory, which had a fair value of $81,000, and buildings and equipment, which had a fair value of $185,000. At December 31, 20X4, Professor reported accounts payable of $12,500 to Scholar, which reported an equal amount in its accounts receivable. Required: a. Record the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Professor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20X4, fr $102,200. The fair
value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies
Included the following amounts as of the date of acquisition:
Item
Cash
Accounts Receivable
Inventory
Land
Buildings & Equipment
Less: Accumulated Depreciation.
Investment in Scholar Corporation
Total Assets
Accounts Payable
Mortgage Payable
Common Stock
Retained Earnings
Total Liabilities & Stockholders' Equity
Professor
Corporation
$
50,300
90,000
Scholar
Corporation
$21,000
44,000
130,000
75,000
60,000
30,000
410,000
250,000
(150,000)
(80,000)
102,200
$ 692,500
$340,000
$
152,500
$ 35,000
250,000
180,000
80,000
40,000
210,000
85,000
$
692,500
$340,000
At the date of the business combination, the book values of Scholar's assets and liabilities approximated fair value except for
Inventory, which had a fair value of $81,000, and buildings and equipment, which had a fair value of $185,000. At December 31, 20X4.
Professor reported accounts payable of $12,500 to Scholar, which reported an equal amount in its accounts receivable.
Required:
a. Record the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business
combination. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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