Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume that Parent Company decides to acquire Sub Company for $564,000 of debentures Sub Company Balance Sheet Prepare the consolidating journal entries for a 100%

Assume that Parent Company decides to acquire Sub Company for $564,000 of debentures
Sub Company Balance Sheet Prepare the consolidating journal entries for a 100% Asset Acquisition
Assets, Liabilities & Equities Book Value Fair Value Account Amount DR CR
Cash $40,000 $40,000
AR $15,000 $10,000
Inventory $105,000 $200,000
Land $60,000 $100,000
Plant and Equipment $400,000 $300,000
Less: Accumulated Depreciation -$150,000
Goodwill $10,000
Patent $0 $0
Total Assets $480,000 $650,000
AP $50,000 $50,000
Common Stock $100,000
Additional Paid In Capital $60,000
Retained Earnings $270,000
Total Liabilities & Equity $480,000
Assume that Parent Company decides to acquire Sub Company for $580,000 of debentures
Sub Company Balance Sheet Prepare the consolidating journal entries for a 100% Asset Acquisition
Assets, Liabilities & Equities Book Value Fair Value Account Amount DR CR
Cash $40,000 $40,000
AR $15,000 $10,000
Inventory $105,000 $200,000
Land $60,000 $100,000
Plant and Equipment $400,000 $300,000
Less: Accumulated Depreciation -$150,000
Goodwill $10,000
Patent $0 $0
Total Assets $480,000 $650,000
AP $50,000 $50,000
Common Stock $100,000
Additional Paid In Capital $60,000
Retained Earnings $270,000
Total Liabilities & Equity $480,000
Assume that Parent Company decides to acquire Sub Company for $625,000 of debentures
Sub Company Balance Sheet Prepare the consolidating journal entries for a 100% Asset Acquisition (using Cash)
Assets, Liabilities & Equities Book Value Fair Value Account Amount DR CR
Cash $40,000 $40,000
AR $15,000 $10,000
Inventory $105,000 $200,000
Land $60,000 $100,000
Plant and Equipment $400,000 $300,000
Less: Accumulated Depreciation -$150,000
Goodwill $10,000
Patent $0 $0
Total Assets $480,000 $650,000
AP $50,000 $50,000
Common Stock $100,000
Additional Paid In Capital $60,000
Retained Earnings $270,000
Total Liabilities & Equity $480,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Auditing And Other Assurance Services

Authors: Ray Whittington, Kurt Pany

13th Edition

007232726X, 9780072327267

More Books

Students also viewed these Accounting questions

Question

=+What do you think about the CDFI Fund, establish in 1994?

Answered: 1 week ago