Answered step by step
Verified Expert Solution
Question
1 Approved Answer
All pics in order for the word problem. Nothing is missing. On February 1, 2024, Sweet Acacia Company purchased 95% of the outstanding common stock
All pics in order for the word problem. Nothing is missing.
On February 1, 2024, Sweet Acacia Company purchased 95% of the outstanding common stock of Michelle Cornpany and 85% of the outstanding common stock of Anthony Company. Immediately before the two acquisitions, balance sheets of the three companies were as follows: The following additional information is relevant. 1. One week before the acquisitions, Sweet Acacia Company had advanced $12,500 to Michelle Company and $4,900 to Anthony Company. Michelle Company recorded an increase to Accounts Payable for its advance, but Anthony Company had not recorded the transaction. 2. On the date of acquisition. Sweet Acacia Company owed Michelle Company $12,000 for purchases on account, and Anthony Company owed Sweet Acacia Company $3,500 and Michelle Company $6,000 for such purchases. The goods purchased had all been sold to outside parties prior to acquisition. 3. Sweet Acacia Company exchanged 13,300 shares of its common stock with a fair value of $13 per share for 95% of the outstanding common stock of Michelle Company. In addition, stock issue fees of $4,500 were paid in cash. The acquisition was accounted for as a purchase. 4. Sweet Acacia Company paid $51,000 cash for the 85% interest in Anthony Company. 5. 3,000 dollars of Michelle Company's notes payable and $10,200 of Anthony Company's notes payable were payable to Sweet Acacia Company. 6. Assume that for Michelle, any difference between book value and the value implied by the purchase price relates to subsidiary land. However, for Anthony, assume that any excess of book value over the value implied by the purchase price is due to overvalued buildings. Give the book entries to record the two acquisitions in the accounts of Sweet Acacia Company. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Prepare a consolidated balance sheet workpaper immediately after acquisition. (Round answers to 0 decimal places, eg. 125.) Retained Earnings Sweet Acacia Company Michelle Company Anthony Company Noncontrolling Interest Total Liabilities and Equity 129,900 20,200 Prepare a consolidated balance sheet at the date of acquisition for Sweet Acacia Company and its subsidiaries. (Round answers to 0 Liabilities and Stockholders' Equity Current Liabilities $ Total Liabilities $ Stockholders' Equity Total Stockholders' Equity Total Liabilities and Stockholders' Equity On February 1, 2024, Sweet Acacia Company purchased 95% of the outstanding common stock of Michelle Cornpany and 85% of the outstanding common stock of Anthony Company. Immediately before the two acquisitions, balance sheets of the three companies were as follows: The following additional information is relevant. 1. One week before the acquisitions, Sweet Acacia Company had advanced $12,500 to Michelle Company and $4,900 to Anthony Company. Michelle Company recorded an increase to Accounts Payable for its advance, but Anthony Company had not recorded the transaction. 2. On the date of acquisition. Sweet Acacia Company owed Michelle Company $12,000 for purchases on account, and Anthony Company owed Sweet Acacia Company $3,500 and Michelle Company $6,000 for such purchases. The goods purchased had all been sold to outside parties prior to acquisition. 3. Sweet Acacia Company exchanged 13,300 shares of its common stock with a fair value of $13 per share for 95% of the outstanding common stock of Michelle Company. In addition, stock issue fees of $4,500 were paid in cash. The acquisition was accounted for as a purchase. 4. Sweet Acacia Company paid $51,000 cash for the 85% interest in Anthony Company. 5. 3,000 dollars of Michelle Company's notes payable and $10,200 of Anthony Company's notes payable were payable to Sweet Acacia Company. 6. Assume that for Michelle, any difference between book value and the value implied by the purchase price relates to subsidiary land. However, for Anthony, assume that any excess of book value over the value implied by the purchase price is due to overvalued buildings. Give the book entries to record the two acquisitions in the accounts of Sweet Acacia Company. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Prepare a consolidated balance sheet workpaper immediately after acquisition. (Round answers to 0 decimal places, eg. 125.) Retained Earnings Sweet Acacia Company Michelle Company Anthony Company Noncontrolling Interest Total Liabilities and Equity 129,900 20,200 Prepare a consolidated balance sheet at the date of acquisition for Sweet Acacia Company and its subsidiaries. (Round answers to 0 Liabilities and Stockholders' Equity Current Liabilities $ Total Liabilities $ Stockholders' Equity Total Stockholders' Equity Total Liabilities and Stockholders' EquityStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started