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: Problem Company Solution Dairy Assets Cash & Receivables Inventory Land Buildings & Equipment (net) Investment in Solution Dairy Total Assets Liabilities & Stockholders' Equity Current Payables Long-Term Liabilities Common Stock Retained Earnings Total Liabilities & Stockholders' Equity $ 137,000 223,000 86,000 394,000 264, 600 $1,104,600 $ 84,000 104,000 56,000 233,000 $477,000 $ 75,000 259, 600 390,000 380,000 $1,104,600 $ 28,000 175,000 73,000 201,800 $477,000 The fair value of the noncontrolling interest at the date of acquisition was determined to be $29,400. The full amount of the increase over book value is assigned to land held by Solution. At the date of acquisition, Solution owed Problem $14,000 plus $1,400 accrued interest. Solution had recorded the accrued interest, but Problem had not. PROBLEM COMPANY AND SUBSIDIARY Consolidated Balance Sheet Worksheet Consolidation Entries Solution Problem Co. Dairy DR CR Consolidated $ 223,000 86,000 394,000 264,600 967,600 $ 84,000 104,000 56,000 233,000 $ 84,000 327,000 142,000 627,000 264,600 $ 1,444,600 $ 477,000 $ 0 $ 0 Assets Cash and receivables Inventory Land Buildings and equipment (net) Investment in Solution Dairy Total Assets Liabilities & Equity Current payables Long-term liabilities Common stock Retained earnings NCI in NA of Solution Dairy Total Liabilities & Equity $ $ 75,000 $ 259,600 390,000 28,000 175,000 73,000 201,000 103,000 434,600 463,000 201,000 $ 724,600 $ 477,000 $ 0 $ 0 $ 1,201,600