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On 1-1 2019, Dubai Inc. purchased 95 percent of Sub. Inc. for 120,000 cash. The Balance Sheet of each corporation just prior to the acquisition

On 1-1 2019, Dubai Inc. purchased 95 percent of Sub. Inc. for 120,000 cash. The Balance Sheet of each corporation just prior to the acquisition presented below. Additionally, book value and fair value for all of Subs assets and liabilities are equal, with the exception of Property, Plant and Equipment, whose fair value is 47,000.

Balance sheet before acquisition

Balance Sheet

Dubai Inc.

SUB Inc.

Assets

1/1/2019

1/1/2019

Current Assets

Cash

$170,000

$21,000

Accounts receivable (Net)

60,000

45,000

Inventory

50,000

45,000

Total Current Assets

$280,000

$111,000

Fixed Assets

Property, Plant, and Equipment (Net of Accumulated Depreciation)

265,000

42,000

Goodwill

Total Assets

545,000

153,000

Liabilities

Current Liabilities

Accounts Payable

$70,000

$30,000

Accruals Payable

20,000

15,000

Total Current Liabilities

$90,000

$45,000

Non-Current Liabilities

Bonds Payable

$180,000

Total liabilities

$270,000

$45,000

Shareholders' Equity

Non-Controlling Interest (Share of Subsidiary)

$

$

Common Stock ($5 Par)

100,000

55,000

Paid In Capital

20,000

8,000

Retained Earnings

155,000

45,000

Total Shareholders' Equity

$275,000

$108,000

Total Liabilities and Shareholder's Equity

$545,000

$153,000

Prepare the necessary work paper adjusting entries on the date of purchase.

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