Prince Corp. and Sprite Corp. reported the following balance sheets at January 1, 20X1:

On January 2, 20X1, Prince issued $36,000 of stock and used the proceeds to purchase 90% of Sprite’s common stock. The excess of the purchase price over Sprite’s book value of net assets was allocated 60% to inventory and 40% to goodwill.

Required:

Show the amounts that Prince will report on its January 2, 20X1, consolidated balance sheet for the following items under (a) the acquisition method and (b) the purchase method if the acquisition had taken place when that method was required under U.S. GAAP.

1. Current assets.

2. Noncurrent assets.

3. Goodwill.

4. Current liabilities.

5. Noncurrent liabilities.

6. Stockholders’ equity (controlling interest).

7. Stockholders’ equity (noncontrolling or minority interest).

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Prince Sprite Current assets Noncurrent assets $15,000 25,000 $30,000 55,000 Total assets $85,000 $40,000 $10,000 5,000 Current liabilities $20,000 20,000 Long-term debt Stockholders' equity 45,000 25,000 Total liabilities and stockholders' equity $85,000 $40,000