Chapter A2, Problem 28E

To determine

(a)

Introduction:

When a company holds 50% or more of the common stock of another company then both the companies are treated as a single entity. In such a case, consolidated statements are prepared.

To prepare:

Journal entry for business combination.

To determine

(b)

Introduction:

When a company holds 50% or more of the common stock of another company then both the companies are treated as a single entity. In such a case, consolidated statements are prepared.

To prepare:

Balance Sheet of A Inc. (post acquisition).

To determine

(c)

Introduction:

When a company holds 50% or more of the common stock of another company then both the companies are treated as a single entity. In such a case, consolidated statements are prepared.

To prepare:

Balance Sheet of D Corporation. (post acquisition).

To determine

(d)

Introduction:

When a company holds 50% or more of the common stock of another company then both the companies are treated as a single entity. In such a case, consolidated statements are prepared.

To calculate:

The goodwill and amount adjusted in the book value.

To determine

(e)

Introduction:

When a company holds 50% or more of the common stock of another company then both the companies are treated as a single entity. In such a case, consolidated statements are prepared.

To prepare:

Consolidated Balance Sheet.