Majority-Owned Subsidiary Acquired et Higher than Book Value LO 5-2 E5-6 Professor Corporation acquired 70 percent of Scholar Corporation's common stock on December 31, 20x4, for $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition Professor Scholar Item Corporation Corporation S s0,300 Cash $ 21,000 Accounts Receivable 90,000 44,000 Inventory 130,000 75,000 Land 60,000 30,000 Buildings & Equipment 410,000 250,000 Less: Accumulated Depreciation (150,000) (80,000) Investment in Scholar Corporation 102,200 Total Assets $692,500 $340,000 $ 35,000 Accounts Payable $152,500 Mortgage Payable 250,000 180,000 Common Stock 80,000 40,000 Retained Earnings 210,000 85,000 Total Liabilities & Stockholders' Equity $692,500 $340,000 At the date of the business combination, the book values of Scholar's assets and liabilities approximated fair value except Page 216 for inventory, which had a fair value of $81,000, and buildings and equipment, which had a fair value of $185,000. At December 31, 20x4, Professor reported accounts payable of $12,500 to Scholar, which reported an equal amount in its accounts receivable. Required a Give the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination. b. Prepare a consolidated balance sheet worksheet c. Prepare a consolidated balance sheet in good form. worksheet. -6 Majority-Owned Subsidiary Acquired at Higher than Book Value Zenith Corporation acquired 70 percent of Down Corporation's common stock on December 31, 20X4, for $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Zenith Down Item Corporation Corporation $ 50,300 90,000 130,000 60,000 410,000 (150,000) 102,200 Cash Accounts Receivable $ 21,000 44,000 75,000 30,000 250,000 (80,000) Inventory Land Buildings& Equipment Less: Accumulated Depreciation Investment in Down Corporation Stock Total Assets $692,500 $340,000 Accounts Payable Mortgage Payable Common Stock Retained Earnings $152,500 250,000 80,000 210,000 $ 35,000 180,000 40,000 85,000 Total Liabilities & Stockholders' Equity $692,500 $340,000 222 Chapter 5 Consolidation of Less-t wony wneu onse At the date of the business combination, the book values of Down's assets and liabilities approxi- mated fair value except for inventory, which had a fair value of $81,000, and buildings and equin- ment, which had a fair value of $185,000. At December 31, 20X4, Zenith reported accounts ayable of $12,500 to Down, which reported an equal amount in its accounts receivable Required a. Give the consolidation entry or entries needed to prepare a consolidated balance sheet immedi ately following the business combination. b. Prepare a consolidated balance sheet worksheet. c. Prepare a consolidated balance sheet in good form
