Question
In January 1, 2014 James Company has acquired 85% of LuLu Company for $2,125,000 on the date of the acquisition the subsidiary had retained earnings
In January 1, 2014 James Company has acquired 85% of LuLu Company for $2,125,000 on the date of the acquisition the subsidiary had retained earnings $650,000 and a capital of $1,100,000.
Separate balance sheet as of 1 January 2014 for James and its Subsidiary.
Description | Parents | Subsidiary | |
Cash | 60,000 | 35,000 | |
Receivable | 35,000 | 40,000 | |
Land | 1,550,000 | 550,000 | |
Property | 1,500,000 | 1,200,000 | |
Investment in Subsidiary | 2,125,000 | - | |
Total asset | 5,270,000 | 1,825,000 | |
|
|
| |
Account payable | 50,000 | 60,000 | |
Other liabilities | 67,000 | 15,000 | |
Capital stock | 3,900,000 | 1,100,000 | |
Retained earnings | 1,253,000 | 650,000 | |
Total equity and liabilities | 5,270,000 | 1,825,000 |
Q-Prepare the consolidated balance sheet as of January 1, 2014.
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