Chapter 4, Problem 4.28P

Consolidated Balance Sheet
Powder Company spent $240,000 to acquire all of Sawmill Corporation’s stock on January 1,20X2. The balance sheets of the two companies on December 31, 20X3, showed the following amounts:
  

Sawmill reported retained earnings of $100,000 at the date of acquisition. The difference between the acquisition price and underlying book value is assigned to buildings and equipmentwith a remaining economic life of 10 years from the date of acquisition. Assume Sawmill’s accumulated depreciation on the acquisition date was $25,000.
Required
a. Give the appropriate consolidation entry or entries needed to prepare a consolidated balancesheet as of December 31, 20X3.
b. Prepare a consolidated balance sheet worksheet as of December 31, 20X3.