Exercise 3 3 On January 2, 2014, Prunce Company acquired 90 of the outstanding common stock of Sun Company for $180,700 cash Just before the acquisition, the balance sheets of the two companies were as follows Prunce Sun Cash $282,130 $ 59,040 Accounts receivable (net) 142,020 24,810 Inventory 118,670 53,230 Plant and equipment (net) 395,640 92,960 Land 62,550 29,220 Total asset $1,001,010 $259,260 Accounts payable $106,440 $ 50,420 Mortgage payable 67,320 37,660 Common stock, $2 par value 421,400 76,960 Other contributed capital 217,440 21,970 Retained earnings 188,410 72,250 Total equities $1,001,010 $259,260 The fair values of Sun Companys assets and liabilities are equal to their book values with the exception of land (a) Your answer is correct Prepare a journal entry to record the purchase of Sun Companys common stock (If no entry is required, select No Entry for the account titles and enter 0 for the amounts Credit account titles are automatically indented when the amount is entered Do not indent manually ) Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT Attempts 2 of 5 used (b) Your answer is partially correct Try again Prepare a consolidated balance sheet at the date of acquisition (Round answers to 0 decimal places, e g 125 List assets in order of liquidity ) PRUNCE COMPANY AND SUBSIDIARY Consolidated Balance Sheet January 2, 2014For the Year Ended January 2, 2014For the Quarter Ended January 2, 2014 Assets $ $ $ $ Your answer is partially correct Try again Prepare a consolidated balance sheet at the date of acquisition (Round answers to o decimal places, e g 125 List assets in order of liquidity ) PRUNCE COMPANY AND SUBSIDIARY Consolidated Balance Sheet January 2, 2014 Assets Cash 160470 Accounts Receivable 166830 Inventory 171900 Plant and Equipment 488600 X Land 91770 X Total Assets Liabilities and Stockholders' Equity Liabilities Accounts Payable 156860 Mortgage Payable 104980 Total Liabilities 261840 Stockholders' Equity X 239410 Other Contributed Capital Retained Earnings X 260660 Common Stock Noncontrolling Interest Total Stockholders' Equity X Total Liabilities and Stockholders' Equity

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Exercise 3-3 On January 2, 2014, Prunce Company acquired 90% of the outstanding common stock of Sun Company for $180,700 cash. Just before the acquisition,

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Exercise 3-3

On January 2, 2014, Prunce Company acquired 90% of the outstanding common stock of Sun Company for $180,700 cash. Just before the acquisition, the balance sheets of the two companies were as follows:

	*Prunce*	*Sun*
Cash	$282,130	$ 59,040
Accounts receivable (net)	142,020	24,810
Inventory	118,670	53,230
Plant and equipment (net)	395,640	92,960
Land	62,550	29,220
Total asset	$1,001,010	$259,260

Accounts payable	$106,440	$ 50,420
Mortgage payable	67,320	37,660
Common stock, $2 par value	421,400	76,960
Other contributed capital	217,440	21,970
Retained earnings	188,410	72,250
Total equities	$1,001,010	$259,260

The fair values of Sun Companys assets and liabilities are equal to their book values with the exception of land.

(a)


	Your answer is correct.

Prepare a journal entry to record the purchase of Sun Companys common stock. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

SHOW LIST OF ACCOUNTS
LINK TO TEXT

Attempts: 2 of 5 used

(b)


	Your answer is partially correct. Try again.

Prepare a consolidated balance sheet at the date of acquisition. (Round answers to 0 decimal places, e.g. 125. List assets in order of liquidity.)

PRUNCE COMPANY AND SUBSIDIARY Consolidated Balance Sheet January 2, 2014For the Year Ended January 2, 2014For the Quarter Ended January 2, 2014
Assets
			$




			$


			$








			$

Your answer is partially correct. Try again. Prepare a consolidated balance sheet at the date of acquisition. (Round answers to o decimal places, e.g. 125. List assets in order of liquidity.) PRUNCE COMPANY AND SUBSIDIARY Consolidated Balance Sheet January 2, 2014 Assets Cash 160470 Accounts Receivable 166830 Inventory 171900 Plant and Equipment 488600 X Land 91770 X Total Assets Liabilities and Stockholders' Equity Liabilities Accounts Payable 156860 Mortgage Payable 104980 Total Liabilities 261840 Stockholders' Equity X 239410 Other Contributed Capital - Retained Earnings X 260660 Common Stock Noncontrolling Interest Total Stockholders' Equity X Total Liabilities and Stockholders' Equity