Question
On January 1, 20X8, Potter Corporation acquired 90 percent of Shoemaker Companys voting stock, at underlying book value. The fair value of the noncontrolling interest
On January 1, 20X8, Potter Corporation acquired 90 percent of Shoemaker Companys voting stock, at underlying book value. The fair value of the noncontrolling interest was equal to 10 percent of the book value of Shoemaker at that date. Potter uses the fully adjusted equity method in accounting for its ownership of Shoemaker. On December 31, 20X9, the trial balances of the two companies are as follows:
Potter Company | Shoemaker Corporation | |||||||||||||
Debit | Credit | Debit | Credit | |||||||||||
Current Assets | $ | 200,000 | $ | 140,000 | ||||||||||
Depreciable Assets | 350,000 | 250,000 | ||||||||||||
Investment in Shoemaker Corp. | 162,000 | |||||||||||||
Depreciation Expense | 27,000 | 10,000 | ||||||||||||
Other Expenses | 95,000 | 60,000 | ||||||||||||
Dividends Declared | 20,000 | 10,000 | ||||||||||||
Accumulated Depreciation | $ | 118,000 | $ | 80,000 | ||||||||||
Current Liabilities | 100,000 | 80,000 | ||||||||||||
Long-Term Debt | 100,000 | 50,000 | ||||||||||||
Common Stock | 100,000 | 50,000 | ||||||||||||
Retained Earnings | 150,000 | 100,000 | ||||||||||||
Sales | 250,000 | 110,000 | ||||||||||||
Income from Subsidiary | 36,000 | |||||||||||||
$ | 854,000 | $ | 854,000 | $ | 470,000 | $ | 470,000 | |||||||
Based on the preceding information, what amount would be reported as total assets in the consolidated balance sheet at December 31, 20X9?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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