Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
On January 1, 2018, Boston paid $10,000 cash and borrowed 145,000 to obtain 80 percent of the outstanding common shares of Westford. The 145,000 debt
On January 1, 2018, Boston paid $10,000 cash and borrowed 145,000 to obtain 80 percent of the outstanding common shares of Westford. The 145,000 debt is payable in 10 equal annual principal payments, plus interest (annual interest rate 10%), beginning December 31. On the date of acquisition, Westford's book value was 145,000 The excess fair value of the investment over the underlying book value of the acquired net assets is allocated to inventory (60%), a building (20%), and to goodwill (20%). Inventories are sold on FIFO basis. Buildings are depreciated in 10 years, straight-line. Westford announces no net income or dividends during 2018 and 2019. On December 31, 2019, Boston Corporation and Westford Corporation had condensed balance sheets as follows: Current Assets Noncurrent Assets Total Assets Boston 165,000 185,000 350,000 Westford 115,000 135,000 250,000 105,000 Current Liabilities Long-term Debt Stockholders' equity Total Liability and Stockholders' equity 125.000 145,000 80,000 145,000 350,000 250,000 On a consolidated balance sheet, what should be the amount for each of the following? (Hint: When you consider each type of firm resources, such as current assets, think about how the above information affects your consideration. For example, are inventories current assets? Similar considerations shall be applied to answering all questions). a. Consolidated Current assets on December 31, 2019 b. Consolidated Noncurrent assets on December 31, 2019 c. Consolidated Current Liabilities on December 31, 2019 d. Consolidated Noncurrent liabilities on December 31, 2019 e. Consolidated Stockholders' equity on December 31, 2019 f. Consolidated Investment in Westford on December 31, 2019
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started