Question
On June 10, 20X8, Playoff Corporation acquired 100 percent of Series Company's common stock. Summarized balance sheet data for the two companies immediately after the
On June 10, 20X8, Playoff Corporation acquired 100 percent of Series Company's common stock. Summarized balance sheet data for the two companies immediately after the stock acquisition are as follows:
| Item | Playoff Corporation | Series Company | |
|---|---|---|---|
| Book Value | Fair Value | ||
| Cash | $ 16,000 | $ 6,000 | $ 6,000 |
| Accounts Receivable | 32,000 | 12,000 | 12,000 |
| Inventory | 99,000 | 39,000 | 44,000 |
| Buildings and Equipment (net) | 138,000 | 69,000 | 89,000 |
| Investment in Series Company | 155,000 | ||
| Total | $ 440,000 | $ 126,000 | $ 151,000 |
| Accounts Payable | $ 11,000 | $ 2,000 | $ 2,000 |
| Bonds Payable | 148,000 | 18,000 | $ 18,000 |
| Common Stock | 46,000 | 18,000 | |
| Retained Earnings | 235,000 | 88,000 | |
| Total | $ 440,000 | $ 126,000 | $ 20,000 |
Required:
a. Prepare the consolidating entries required to prepare a consolidated balance sheet immediately after the acquisition of Series Company shares.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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Auditing Fundamentals
Authors: Marlene Davies, John Aston
1st Edition
0273711733, 978-0273711735
