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On January 1 2017 the balance sheets of Potter Co. and Hogwarts Co. were as follows: Potter Hogwarts cash 1,000,000 50,000 equipment 1,000,000 100,000 a/d

On January 1 2017 the balance sheets of Potter Co. and Hogwarts Co. were as follows:

Potter Hogwarts
cash 1,000,000 50,000
equipment 1,000,000 100,000
a/d equip 100,000 10,000
Land 2,000,000 20,000
building 3,000,000 100,000
a/d building 1,000,000 30,000
patent 50,000 50,000
total assets 5,950,000 280,000
accounts payable 1,000,000 40,000
notes payable 1,000,000 40,000
common stock $5 par 3,000,000 150,000
apic c/s 100,000 0
r/e 850,000 50,000
On January 2nd Potter acquired 80% of the stock of Hogwarts by issuing 50,000 shares of common stock when the stock was
selling for $11 per share. At that time the fair market value of Hogwarts assets were:
equipment 60,000
Land 30,000
building 110,000
patent 40,000
REQUIRED:
A) MAKE THE JOURNAL ENTRY POTTER MAKES WHEN IT ISSUES THE STOCK TO ACQUIRE HOGWARTS
B) MAKE THE JOURNAL ENTRY HOGWARTS MAKES WHEN POTTER ISSUES THE STOCK TO ACQUIRE HOGWARTS
C) MAKE ANY NECESSARY WORKSHEET ENTRIES
D) PREPARE A CONSOLIDATED BALANCE SHEET ON 1/2/2017
BONUS 2 PTS NO PARTIAL CREDIT: WHAT WOULD BE THE AMOUNT OF GOODWILL IF POTTER WAS DOING ITS BOOKS UNDER IFRS?

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