Problem Company owns 90 percent of Solution Dairy’s stock. The balance sheets of the two companies immediately after the Solution acquisition showed the following amounts: Problem CompanySolution DairyAssets Cash & Receivables$ 130,000$ 70,000Inventory210,00090,000Land70,00040,000Buildings & Equipment (net)390,000220,000Investment in Solution Dairy270,000 Total Assets$ 1,070,000$ 420,000Liabilities & Stockholders’ Equity Current Payables$ 80,000$ 40,000Long-Term Liabilities200,000100,000Common Stock400,00060,000Retained Earnings390,000220,000Total Liabilities & Stockholders’ Equity$ 1,070,000$ 420,000The fair value of the noncontrolling interest at the date of acquisition was determined to be $30,000. The full amount of the increase over book value is assigned to land held by Solution. At the date of acquisition, Solution owed Problem $8,000 plus $900 accrued interest. Solution had recorded the accrued interest, but Problem had not.Required:Prepare a consolidated balance sheet worksheet.

A consolidated balance sheet refers to the form of a balance sheet that reflects competition for the…

Answered: tock. The balance sheets of the two…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Problem Company owns 90 percent of Solution Dairy’s stock. The balance sheets of the two companies immediately after the Solution acquisition showed the following amounts:

	Problem Company	Solution Dairy
Assets
Cash & Receivables	$ 130,000	$ 70,000
Inventory	210,000	90,000
Land	70,000	40,000
Buildings & Equipment (net)	390,000	220,000
Investment in Solution Dairy	270,000
Total Assets	$ 1,070,000	$ 420,000
Liabilities & Stockholders’ Equity
Current Payables	$ 80,000	$ 40,000
Long-Term Liabilities	200,000	100,000
Common Stock	400,000	60,000
Retained Earnings	390,000	220,000
Total Liabilities & Stockholders’ Equity	$ 1,070,000	$ 420,000

The fair value of the noncontrolling interest at the date of acquisition was determined to be $30,000. The full amount of the increase over book value is assigned to land held by Solution. At the date of acquisition, Solution owed Problem $8,000 plus $900 accrued interest. Solution had recorded the accrued interest, but Problem had not.

Required:

Prepare a consolidated balance sheet worksheet.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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