Arlington Industries paid $540,000 to purchase 75% of the outstanding stock of Brookings Corporation, on December 31,
Question:
Arlington Industries paid $540,000 to purchase 75% of the outstanding stock of Brookings Corporation, on December 31, 2016. Any excess fair value over the identified assets and liabilities is attributed to goodwill.The following year-end information was available just before the purchase:
ArlingtonBrookingsBrookings
BookBookFair
Value Value Value
Cash$756,000$80,000$80,000
Accounts Receivable260,000152,000152,000
Inventory480,000100,000120,000
Land440,000160,000140,000
Plant and equipment-net1,320,000400,000430,00
Total$3,256,000$892,000$922,000
Accounts Payable$880,000$22,000$22,000
Bonds Payable936,000 200,000 180,000
Capital stock, $10 PV 400,000
Capital stock, $15 PV 450,000
Additional paid-in capital400,000 160,000
Retained earnings640,00060,000
Total$3,256,000$892,000
Required:
- Make Arlington's consolidated balance sheet on December 31, 2016. (Hint, There is no Goodwill.All of the excess will be assigned to assets and liabilities.)
Elimination
Arlington Brookings Debit Credit Consolidated
Assets
Cash $216,000 $80,000
Accts Rec.-net $260,000 $152,000
Inventories $480,000 $100,000
Land $440,000 $160,000
Plant assets - net $1,320,000 $400,000
Investments in Tree $540,000
Total Assets $3,256,000 $892,000
Liabilities and Equities
Payables $880,000 $22,000
Bonds payable $936,000 $200,000
Capital Stock $400,000 $450,000
Add'l paid-in-captial $400,000 $160,000
Retained Earnings $640,000 $60,000
Noncontrolling Interest
Total Liab. and Equity $3,256,000 $892,000 740,000 740,000
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