Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2021, for $786,720 cash. At the acquisition date, Sierras

Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2021, for $786,720 cash. At the acquisition date, Sierras total fair value, including the noncontrolling interest, was assessed at $983,400 although Sierras book value was only $648,000. Also, several individual items on Sierras financial records had fair values that differed from their book values as follows:

image text in transcribed

For internal reporting purposes, Padre, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2021, for both companies.

image text in transcribed

At year-end, there were no intra-entity receivables or payables.

Prepare a worksheet to consolidate the financial statements of these two companies. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.)

Land

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting A Critical Approach

Authors: John Friedlan

3rd Edition

0070967601, 978-0070967601

More Books

Students also viewed these Accounting questions

Question

16.7 Describe the three steps in the collective bargaining process.

Answered: 1 week ago