Question
Pencil Company acquired 80 percent of Stylus Corporations stock on January 2, 20X3, for $88,000 cash. Summarized balance sheet data for the companies on December
Pencil Company acquired 80 percent of Stylus Corporations stock on January 2, 20X3, for $88,000 cash. Summarized balance sheet data for the companies on December 31, 20X2, follow:
| Pencil Company | Stylus Corporation | ||||||||||||||||
| Book Value | Fair Value | Book Value | Fair Value | ||||||||||||||
| Cash | $ | 215,000 | $ | 215,000 | $ | 55,000 | $ | 55,000 | |||||||||
| Other Assets | 420,000 | 420,000 | 131,000 | 131,000 | |||||||||||||
| Total Debits | $ | 635,000 | $ | 186,000 | |||||||||||||
| Current Liabilities | $ | 96,000 | 96,000 | $ | 76,000 | 76,000 | |||||||||||
| Common Stock | 297,000 | 55,000 | |||||||||||||||
| Retained Earnings | 242,000 | 55,000 | |||||||||||||||
| Total Credits | $ | 635,000 | $ | 186,000 | |||||||||||||
Required: Prepare a consolidated balance sheet immediately following the acquisition.
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
