On February 1, 2024, Waterway Company purchased 95% of the outstanding common stock of Karen Company and 85% of the outstanding common stock of Paul Company. Immediately before the two acquisitions, balance sheets of the three companies were as follows: Liabilities and Stockholders' Equity 5 $ The following additional information is relevant. 1. One week before the acquisitions, Waterway Company had advanced $12,000 to Karen Company and $5,000 to Paul Company. Karen Company recorded an increase to Accounts Payable for its advance, but Paul Company had not recorded the transaction. 2. On the date of acquisition, Waterway Company owed Karen Company $13,000 for purchases on account, and Paul Company owed Waterway Company $3,700 and Karen Company $6,000 for such purchases. The goods purchased had all been sold to outside parties prior to acquisition. 3. Waterway Company exchanged 13,300 shares of its common stock with a falr value of $12 per share for 95% of the outstanding common stock of Karen Company. In addition, stock issue fees of $5,000 were paid in cash. The acquisition was accounted for as a purchase. 4. Waterway Company paid $51,000 cash for the 85% Interest In Paul Company. 5. 3,500 dollars of Karen Company's notes payable and $10,200 of Paul Company's notes payable were payable to Waterway Company. 6. Assume that for Karen, any difference between book value and the value implied by the purchase price relates to subsidiary land. However, for Paul, assume that any excess of book value over the value implied by the purchase price is due to overvalued buildings. Give the book entries to record the two acquisitions in the accounts of Waterway Company. (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. List all debit entries before credit entries.) Prepare a consolidated balance sheet at the date of acquisition for Waterway Company and its subsidiarles. (Round onswers to 0 decimal places, eg. 125. List assets in order of liquidity List Property, plant and equipment in order of land, buildings and equipment.) Prepare a consolidated balance sheet at the date of acquisition for Waterway Company and its subsidiaries. (Round onswers to 0 decimal places, eg. 125. List assets in order of liquidity List Property, plant and equipment in order of land, buildings and equipment.) On February 1, 2024, Waterway Company purchased 95% of the outstanding common stock of Karen Company and 85% of the outstanding common stock of Paul Company. Immediately before the two acquisitions, balance sheets of the three companies were as follows: Liabilities and Stockholders' Equity 5 $ The following additional information is relevant. 1. One week before the acquisitions, Waterway Company had advanced $12,000 to Karen Company and $5,000 to Paul Company. Karen Company recorded an increase to Accounts Payable for its advance, but Paul Company had not recorded the transaction. 2. On the date of acquisition, Waterway Company owed Karen Company $13,000 for purchases on account, and Paul Company owed Waterway Company $3,700 and Karen Company $6,000 for such purchases. The goods purchased had all been sold to outside parties prior to acquisition. 3. Waterway Company exchanged 13,300 shares of its common stock with a falr value of $12 per share for 95% of the outstanding common stock of Karen Company. In addition, stock issue fees of $5,000 were paid in cash. The acquisition was accounted for as a purchase. 4. Waterway Company paid $51,000 cash for the 85% Interest In Paul Company. 5. 3,500 dollars of Karen Company's notes payable and $10,200 of Paul Company's notes payable were payable to Waterway Company. 6. Assume that for Karen, any difference between book value and the value implied by the purchase price relates to subsidiary land. However, for Paul, assume that any excess of book value over the value implied by the purchase price is due to overvalued buildings. Give the book entries to record the two acquisitions in the accounts of Waterway Company. (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. List all debit entries before credit entries.) Prepare a consolidated balance sheet at the date of acquisition for Waterway Company and its subsidiarles. (Round onswers to 0 decimal places, eg. 125. List assets in order of liquidity List Property, plant and equipment in order of land, buildings and equipment.) Prepare a consolidated balance sheet at the date of acquisition for Waterway Company and its subsidiaries. (Round onswers to 0 decimal places, eg. 125. List assets in order of liquidity List Property, plant and equipment in order of land, buildings and equipment.)
