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E7-2) Block Purchase, Control with first block Baker corporation purchases a 60% interest in Hardee Company on January 1, 2015, for $135,000. On that date,
| E7-2) Block Purchase, Control with first block | ||||||
| Baker corporation purchases a 60% interest in Hardee Company on January 1, 2015, for $135,000. On that date, Hardee Company has the following stockholders equity: | ||||||
| Common Stock ($10 par) | $100,000 | |||||
| Retained Earnings | $20,000 | |||||
| Any excess of cost over fair value is due to equipment with a 10-year life. Baker corporation purchases another 20% interest in Hardee company for $40,000 on January 1, 2017 when hardee company has the following stockholders equity: | ||||||
| Common Stock ($10 par) | $100,000 | |||||
| Retained Earnings | $50,000 | |||||
| On December 31, 2019, Baker corporation and hardee company have the following balance sheets: | ||||||
| Baker Corp. | Hardee Corp. | |||||
| Current Assets | $285,000 | $80,000 | ||||
| Investment in Hardee Comp. | $175,000 | |||||
| PPE | $740,000 | $240,000 | ||||
| Total | $1,200,000 | $320,000 | ||||
| Cureent Liabilites | $400,000 | $100,000 | ||||
| Stockholders Equity: | ||||||
| Common Stock | $500,000 | $100,000 | ||||
| Retained Earnings | $300,000 | $120,000 | ||||
| Total: | $1,200,000 | $320,000 | ||||
| Prepare a determination and distribution of excess schedule for the January 1, 2015 acquisition and analysis of the 20% acquisition on January 1, 2017. Prepare the consolidated balance sheet of Baker Corp. and subsidiary Hardee Comp. on December 31, 2019 | ||||||
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