Prophet Corporation acquired 75 percent of Seer Corporation's voting common stock on December 31, 20X4, for $390,000. At the date of combination, Seer reported the following: Assets Current Assets Long-Term Assets (net) Total Event 2 $ 220,000 420,000 At December 31, 20X4, the book values of Seer's net assets and liabilities approximated their fair values, except for buildings, which had a fair value of $80,000 more than book value, and inventories, which had a fair value of $36,000 more than book value. The fair value of the noncontrolling interest was determined to be $130,000 at that date. $ 640,000 Prophet Corporation wishes to prepare a consolidated balance sheet immediately following the business combination. Prepare the consolidation entry or entries needed to prepare a consolidated balance sheet at December 31, 20X4. Inventories Goodwill Buildings Common stock Retained earnings Investment in Seer Corporation Liabilities Current Liabilities Long-Term Liabilities Common Stock Retained Earnings Total Accounts $ 80,000 200,000 120,000 240,000 $ 640,000 Debit 120,000 240,000 36,000 74,000 Credit 360,000 80,000 30,000
Prophet Corporation acquired 75 percent of Seer Corporation's voting common stock on December 31, 20X4, for $390,000. At the date of combination, Seer reported the following: Assets Current Assets Long-Term Assets (net) Total Event 2 $ 220,000 420,000 At December 31, 20X4, the book values of Seer's net assets and liabilities approximated their fair values, except for buildings, which had a fair value of $80,000 more than book value, and inventories, which had a fair value of $36,000 more than book value. The fair value of the noncontrolling interest was determined to be $130,000 at that date. $ 640,000 Prophet Corporation wishes to prepare a consolidated balance sheet immediately following the business combination. Prepare the consolidation entry or entries needed to prepare a consolidated balance sheet at December 31, 20X4. Inventories Goodwill Buildings Common stock Retained earnings Investment in Seer Corporation Liabilities Current Liabilities Long-Term Liabilities Common Stock Retained Earnings Total Accounts $ 80,000 200,000 120,000 240,000 $ 640,000 Debit 120,000 240,000 36,000 74,000 Credit 360,000 80,000 30,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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please answer within 30 minutes.
![Prophet Corporation acquired 75 percent of Seer Corporation's voting common stock
on December 31, 20X4, for $390,000. At the date of combination, Seer reported the
following:
Assets
Current Assets
Long-Term Assets (net)
Total
Event
1
2
$ 220,000
420,000
At December 31, 20X4, the book values of Seer's net assets and liabilities approximated
their fair values, except for buildings, which had a fair value of $80,000 more than book
value, and inventories, which had a fair value of $36,000 more than book value. The fair
value of the noncontrolling interest was determined to be $130,000 at that date.
$ 640,000
Prophet Corporation wishes to prepare a consolidated balance sheet immediately
following the business combination. Prepare the consolidation entry or entries needed
to prepare a consolidated balance sheet at December 31, 20X4.
Inventories
Goodwill
Buildings
Common stock
Retained earnings
Investment in Seer Corporation
Liabilities
Current Liabilities.
Long-Term Liabilities
Common Stock
Retained Earnings
Total
Accounts
$80,000
200,000
120,000
240,000
$ 640,000
Debit
120,000
240,000
36,000
74,000
Credit
360,000
80,000
30,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F23755f39-ffaf-4cf5-9f2d-a72b6fb0bb96%2F4833f871-4ff8-4378-b857-3be62ebe0aae%2F0ku3ku7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Prophet Corporation acquired 75 percent of Seer Corporation's voting common stock
on December 31, 20X4, for $390,000. At the date of combination, Seer reported the
following:
Assets
Current Assets
Long-Term Assets (net)
Total
Event
1
2
$ 220,000
420,000
At December 31, 20X4, the book values of Seer's net assets and liabilities approximated
their fair values, except for buildings, which had a fair value of $80,000 more than book
value, and inventories, which had a fair value of $36,000 more than book value. The fair
value of the noncontrolling interest was determined to be $130,000 at that date.
$ 640,000
Prophet Corporation wishes to prepare a consolidated balance sheet immediately
following the business combination. Prepare the consolidation entry or entries needed
to prepare a consolidated balance sheet at December 31, 20X4.
Inventories
Goodwill
Buildings
Common stock
Retained earnings
Investment in Seer Corporation
Liabilities
Current Liabilities.
Long-Term Liabilities
Common Stock
Retained Earnings
Total
Accounts
$80,000
200,000
120,000
240,000
$ 640,000
Debit
120,000
240,000
36,000
74,000
Credit
360,000
80,000
30,000
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