Powder Company spent $240,000 to acquire all of Sawmill Corporations stock on January 1, 20X2. The balance

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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:


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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 equipment with 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 balance sheet as of December 31, 20X3.


b. Prepare a consolidated balance sheet worksheet as of December 31, 20X3.

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Advanced Financial Accounting

ISBN: 9781260772135

13th Edition

Authors: Theodore Christensen, David Cottrell, Cassy Budd

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