Consolidated Balance Sheet Jennie’s Plumbing and Heating recently purchased 100 percent of the stock of Ron’s Repair Service. The balance sheets for the two companies immediately after the purchase of Ron’s shares were:

At the balance sheet date, Ron’s Repair owes Jennie’s Plumbing $15,000 on accounts payable.

a. Prepare a consolidated balance sheet for Jennie’s Plumbing and its subsidiary.
. Why are the stockholders’ equity balances of Ron’s Repair not included in the consolidated balance sheet?
. Monona Wholesale Supply has extended credit of $10,000 to Jennie’s Plumbing, and Winona Supply Company has extended credit of $10,000 to Ron’s Repair. Which supplier has the stronger claim on the consolidated cash balance? Explain.
. Jennie’s Plumbing has applied to Fifth National Bank of Tuleville for a $75,000 short-term loan to open a showroom for bathroom and kitchen fixtures. Accounts receivable will be used as collateral, and Jennie’s Plumbing has provided the bank with its consolidated balance sheet prepared immediately after the acquisition of Ron’s Repair.
From the bank’s perspective, how would you rate the sufficiency of the collateral? Explain.
. If Jennie’s Plumbing had purchased only 80 percent of the stock of Ron’s Repair, an item labeled “Noncontrolling Interest” would have been reported in the stockholders’ equity section of the consolidated balance sheet. What does the amount assigned to the noncontrolling or minority interest in the consolidated balance sheet represent?

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Jennie's Plumbing Cash $ 20,000 Ron's Repair $ 8,000 Accounts receivable 50,000 30,000 Inventory 80.000 72,000 Investment in Ron's Repair 150.000 Buildings and equipment 300,000 240,000 Less: Accumulated depreciation (110,000) (80,000) Total assets $490,000 $270,000 Accounts payable $ 60.000 $ 75,000 Taxes payable 70,000 Common stock 200,000 45,000 100,000 Retained earnings Total liabilities and equity 160.000 50,000 $490,000 $270,000