2. On 12/31, Choco acquired Cake by issuing 40,000 shares of its common stock when the market value (=fair value) is $32/share. Cake will remain incorporated. Choco has common stock with $15 par, 50,000 shares outstanding and Cake has $5 par, 60,000 shares outstanding

Choco Book Values	Cake Book Values	Cake Fair Values
Cash and Receivable	350,000	180,000	170,000
Inventories	250,000	100,000	150,000
Land	700,000	120,000	240,000
Building and equipment	600,000	600,000	900,000
Patented technology	100,000	0	60,000
Accounts Payable	300,000	120,000	150,000
Long-term debt	0	400,000	350,000
Common Stock	750,000	300,000
Additional paid in capital	500,000	60,000
Retained earnings 12/31	450,000	120,000
Revenues	350,000	160,000
Expenses	310,000	130,000

.Q7. Prepare a worksheet to consolidate Chocos and Cakes balance sheet.

Q7. choco cake Consolidated entries Consolidated totals

Debit / credit

cash and receivable $324,000 $180,000

Inventory 250,000 100,000

Investment in Cake 1,280,0000

Land 700,000 120,000

Building and Equipment 600,000 600,000

Technology 100,0000

Goodwill 0 0

Total assets $3,254,000 $1,000,000

Accounts payable (300,000) (120,000)

Long-term debt 0 (400,000)

Common stock (1,350,000) (300,000)

Additional paid-in capital (1,168,000) (60,000)

Retained earnings,12/31 (436,000) (120,000)

Total liabilities and equity $(3,254,000) $(1,000,000)