Problem 3-2 On January 1, 2014, Perry Company purchased 8,704 shares of Soho Company's common stock for $115,000. Immediately after the stock acquisition, the statements of financial position of Perry and Soho appeared as follows: Soho $17,440 32,240 25,540 Assets Cash Accounts receivable Inventory Investment in Soho Company Plant assets Accumulated depreciation-plant assets Total Liabilities and Owners' Equity Current liabilities Mortgage notes payable Common stock, $10 par value Other contributed capital Retained earnings Total Perry $40,870 57,470 38,730 115,000 160,480 (55,300 ) $357,250 105,800 (18,540 ) $162,480 $24,580 $20,260 36,760 112,790 131,110 56,330 $357,250 108,800 17,500 11,600 $162,480 (al) Your answer is correct. Calculate the percentage of Soho acquired by Perry Company. 80 Percentage of Soho acquired % Click if you would like to Show Work for this question: Open Show Work (a2) Your answer is correct. 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. Parent Share Non- Controlling Share Entire Value Purchase Price and Implied Value 115000 28750 143750 Less Book Value of Equity Acquired Common Stock 87040 21760 108800 Other Contributed Capital 14000 3500 17500 Retained Earnings 9280 2320 11600 Total Book Value 110320 27580 137900 Difference Between Implied and Book Value 4680 1170 5850 Plant Assets -4680 -1170 -5850 Balance v 0 Click if you would like to Show Work for this question: Open Show Work (b) Prepare a consolidated balance sheet workpaper as of January 1, 2014. PERRY COMPANY AND SUBSIDIARY SOHO Consolidated Balance Sheet Workpaper January 1, 2014 Eliminations Debit Credit Perry Company 40,870 Soho Company 17,440 Noncontrolling Interest Consolidated Balance Cash $ $ $ Accounts Receivable 57,470 32,240 Inventory 38,730 25,540 Investment in Soho 115,000 Difference between Implied and Book Value Plant Assets 160,480 105,800 Accumulated Depreciation (55,300 ) (18,540 ) Total 357,250 162,480 Current Liabilities 20,260 24,580 36,760 Mortgage Note Payable Common Stock: Perry Company 112,790 108,800 Soho Company Other Contributed Capital Perry Company 131,110 17,500 Soho Company Retained Earnings: Retained Earnings: Perry Company 56,330 Soho Company 11,600 Noncontrolling Interest $ Total 357,250 162,480