PROBLEM 3-2 Consolidated Balance Sheet Workpaper

On January 1, 2014, Perry Company purchased 8,000 shares of Soho Companys common stock for $120,000. Immediately after the stock acquisition, the statements of financial position of Perry and Soho appeared as follows:

Assets Perry Soho

Cash $ 39,000 $ 19,000

Accounts receivable 53,000 31,000

Inventory 42,000 25,000

Investment in Soho Company 120,000

Plant assets 160,000 110,500

Accumulated depreciationplant assets (52,000) (19,500)

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Total $362,000 $166,000

Liabilities and Owners Equity

Current liabilities $ 18,500 $ 26,000

Mortgage notes payable 40,000

Common stock, $10 par value 120,000 100,000

Other contributed capital 135,000 16,500

Retained earnings 48,500 23,500

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Total $362,000 $166,000

Required:

A. Calculate the percentage of Soho acquired by Perry Company. Prepare a schedule to compute the difference

between book value of equity and the value implied by the purchase price. Any difference between the book

value of equity and the value implied by the purchase price relates to subsidiary plant assets.

B. Prepare a consolidated balance sheet workpaper as of January 1, 2014.

C. Suppose instead that Perry acquired the 8,000 shares for $20 per share including a $5 per share control

premium. Prepare a computation and allocation of difference schedule.

Please can you help me with Question (C) ONLY You are well come to solve all BUT C Is More Important. Thank you.