Question
Problem Company owns 90 percent of Solution Dairy's stock. The balance sheets of the two companies immediately after the Solution acquisition showed the following
Problem Company owns 90 percent of Solution Dairy's stock. The balance sheets of the two companies immediately after the Solution acquisition showed the following amounts: Assets Cash & Receivables Inventory Land Buildings & Equipment (net) Investment in Solution Dairy Total Assets Current Payables Problem Company $ 138,000 215,000 80,000 Solution Dairy $ 84,000 104,000 42,000 403,000 235,000 267,300 $1,103,300 $465,000 Liabilities & Stockholders' Equity $ 78,000 $27,000 Long-Term Liabilities 257,300 171,000 Common Stock 389,000 60,000 Retained Earnings: Total Liabilities & Stockholders' Equity 379,000 $1,103,300 207,000 $465,000 The fair value of the noncontrolling interest at the date of acquisition was determined to be $29,700. The full amount of the increase over book value is assigned to land held by Solution. At the date of acquisition, Solution owed Problem $15,000 plus $1,300 accrued interest. Solution had recorded the accrued interest, but Problem had not. Required: Prepare a consolidated balance sheet worksheet. (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.)
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