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Question 8 Not yet answered Marked out of 21.00 Prag question Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries Assume that the parent company acquires its subsidiary by exchanging 50,000 shares of its $1 par value Common Stock, with a fair value on the acquisition date of $30 per share, for all of the outstanding voting shares of the investee. In its analysis of the investee company, the parent values all of the subsidiary's assets and liabilities at an amount equaling their book values except for an unrecorded Trademark with a fair value of $120,000, an unrecorded Video Library valued at $300,000, and Patented Technology with a fair value of $60,000 a. Prepare the journal entry that the parent makes to record the acquisition General Journal Description Debit Credit Common stock b. Given the following acquisition date balance sheets of the parent and the subsidiary, prepare the consolidation entries. Balance Sheet Parent Subsidiary Assets 5250.00 $120,000 Accounts receivable 200,000 300,000 300,000 400.000 1,500,000 Property, plant & equipment 4,000,000 800.000 56.250.000 51.620,000 Labtes and stockholders'uty Accounts payabile 5200.000 $80.000 250,000 140,000 Long-term les 1.800.000 500.000 Common 100.000 APIC 2600,000 200,000 Hetained eam 1 000.000 600.000 56.250.000 51.620.000 RE b. Given the following acquisition date balance sheets of the parent and the subsidiary, prepare the consolidation entries. Parent Subsidiary Balance Sheet Assets Cash Accounts receivable Inventory Equity investment Property, plant & equipment $250,020 $120.000 200.000 300,000 300,000 400.000 1,500,000 4,000,000 800,000 $6,250,000 $1,620,000 Liabilities and stockholders' equity Accounts payable Accrued liabilities Long-term labilities Common stock APIC Retained earnings $200 000 $80,000 250,000 140,000 1.800.000 500,000 400,000 100,000 2.600.000 200,000 1,000 000 600,000 56,250,000 $1,620,000 Consolidation Journal Description Debit [E] Common stock APIC Credit IA] Trademark Video Wrary Patented technology Prepare the consolidation spreadsheet. Consolidation Worksheet Question 8 Not yet answered Marked out of 21.00 Prag question Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries Assume that the parent company acquires its subsidiary by exchanging 50,000 shares of its $1 par value Common Stock, with a fair value on the acquisition date of $30 per share, for all of the outstanding voting shares of the investee. In its analysis of the investee company, the parent values all of the subsidiary's assets and liabilities at an amount equaling their book values except for an unrecorded Trademark with a fair value of $120,000, an unrecorded Video Library valued at $300,000, and Patented Technology with a fair value of $60,000 a. Prepare the journal entry that the parent makes to record the acquisition General Journal Description Debit Credit Common stock b. Given the following acquisition date balance sheets of the parent and the subsidiary, prepare the consolidation entries. Balance Sheet Parent Subsidiary Assets 5250.00 $120,000 Accounts receivable 200,000 300,000 300,000 400.000 1,500,000 Property, plant & equipment 4,000,000 800.000 56.250.000 51.620,000 Labtes and stockholders'uty Accounts payabile 5200.000 $80.000 250,000 140,000 Long-term les 1.800.000 500.000 Common 100.000 APIC 2600,000 200,000 Hetained eam 1 000.000 600.000 56.250.000 51.620.000 RE b. Given the following acquisition date balance sheets of the parent and the subsidiary, prepare the consolidation entries. Parent Subsidiary Balance Sheet Assets Cash Accounts receivable Inventory Equity investment Property, plant & equipment $250,020 $120.000 200.000 300,000 300,000 400.000 1,500,000 4,000,000 800,000 $6,250,000 $1,620,000 Liabilities and stockholders' equity Accounts payable Accrued liabilities Long-term labilities Common stock APIC Retained earnings $200 000 $80,000 250,000 140,000 1.800.000 500,000 400,000 100,000 2.600.000 200,000 1,000 000 600,000 56,250,000 $1,620,000 Consolidation Journal Description Debit [E] Common stock APIC Credit IA] Trademark Video Wrary Patented technology Prepare the consolidation spreadsheet. Consolidation Worksheet
