The Wexler Company is looking for a shop in Cincinnati. A certificate of incorporation was obtained in Ohio for the establishment of a company called Major Sales Company, and authorization was received for the issuance of 10,000 shares of Major Sales Company with no par value. On April 1, 1989, Wexler Company acquired all of Major Sales Company stock for $250,000; set value @$10 per share set at this issue. The balance sheet for Wexler Company prior to the establishment of the Major Sales Company reads as follows: Assets: Cash $420,000 Other Assets $780,000 Total Assets $1,200,000 Liability $250,000 Shareholders' Capital: Authorized capital $500,000 Additional paid-in capital $150,000 Retained profit $300,000 $950,000 Total liabilities and capital $1,200,000 a). Prepare the required journal entries in the books of the two companies as a result of the establishment of the Major Sales Company b). Prepare separate balance sheets for the parent company and for the subsidiary. c). Prepare a consolidated balance sheet
The Wexler Company is looking for a shop in Cincinnati. A certificate of incorporation was obtained in Ohio for the establishment of a company called Major Sales Company, and authorization was received for the issuance of 10,000 shares of Major Sales Company with no par value. On April 1, 1989, Wexler Company acquired all of Major Sales Company stock for $250,000; set value @$10 per share set at this issue. The balance sheet for Wexler Company prior to the establishment of the Major Sales Company reads as follows:
Assets:
Cash $420,000
Other Assets $780,000
Total Assets $1,200,000
Liability $250,000
Shareholders' Capital:
Authorized capital $500,000
Additional paid-in capital $150,000
Retained profit $300,000 $950,000
Total liabilities and capital $1,200,000
a). Prepare the required
b). Prepare separate balance sheets for the parent company and for the subsidiary.
c). Prepare a consolidated balance sheet
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