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4110.5 On December 31, 20X8, Paragraph Corporation acquired 80 percent of Sentence Company's common stock for $136,000. At the acquisition date, the book values and
4110.5
On December 31, 20X8, Paragraph Corporation acquired 80 percent of Sentence Company's common stock for $136,000. At the acquisition date, the book values and fair values of all of Sentence's assets and liabilities were equal. Paragraph uses the equity method in accounting for its investment. Balance sheet information provided by the companies at December 31, 20X8, immediately following the acquisition is as follows: Sentence Company 20,000 70,000 90,000 240,000 Paragraph Corporation Cash Accounts Receivable Inventory Fixed Assets (net) Investment in Sentence Co. $74,000 120,000 180,000 350,000 136,000 $860,000 $65,000 350,000 150,000 295,000 $860,000 $420,000 $30,000 220,000 90,000 80,000 $420,000 Total Debits Accounts Payable Notes Payable Common Stock Retained Earnings Total Credits Required: Prepare a consolidated balance sheet for Paragraph at December 31, 20X8Step by Step Solution
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