Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At the date of acquisition, the fair value of the noncontrolling

Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At the date of acquisition, the fair value of the noncontrolling interest was equal to 25 percent of Sauls book value. The balance sheets of the two companies for January 1, 20X1, are as follows:

PENNY MANUFACTURING CORPORATION Balance Sheet January 1, 20X1
Cash $ 244,500 Accounts Payable $ 162,250
Accounts Receivable 78,000 Bonds Payable 387,000
Inventory 112,000 Common Stock 180,000
Buildings & Equipment 609,000 Additional Paid-In Capital 30,000
Less: Accumulated Depreciation (135,000 ) Retained Earnings 387,000
Investment in Saul Corporation 237,750
Total Assets $ 1,146,250 Total Liabilities & Equities $ 1,146,250

SAUL CORPORATION Balance Sheet January 1, 20X1
Cash $ 79,000 Accounts Payable $ 159,000
Accounts Receivable 118,000 Bonds Payable 287,000
Inventory 192,000 Common Stock ($10 par) 100,000
Buildings & Equipment 609,000 Additional Paid-In Capital 30,000
Less: Accumulated Depreciation (235,000 ) Retained Earnings 187,000
Total Assets $ 763,000 Total Liabilities & Equities $ 763,000

On January 2, 20X1, Penny purchased an additional 2,500 shares of common stock directly from Saul for $150,000.

Prepare a consolidated balance sheet worksheet immediately following the issuance of additional shares to Penny. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting 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.)

PENNY MANUFACTURING COMPANY AND SUBSIDIARY
Consolidated Balance Sheet Worksheet
January 1, 20X1
Consolidation Entries
Penny Saul Corp. DR CR Consolidated
Balance Sheet
Assets
Cash
Accounts Receivable
Inventory
Buildings and Equipment
Less: Accumulated Depreciation
Investment in Saul Corp.
Total Assets
Liabilities & Stockholders' Equity
Accounts Payable
Bonds Payable
Common Stock
Additional Paid-In Capital
Retained Earnings
NCI in NA of Saul Corp.
Total Liabilities & Stockholders' Equity

Answer is not complete.

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_2

Step: 3

blur-text-image_3

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

Internal Auditing An Integrated Approach

Authors: Richard E. Cascarino

2nd Edition

0702172693, 978-0702172694

More Books

Students also viewed these Accounting questions

Question

Explain the role of XML in SOAP.

Answered: 1 week ago