Subsidiary Acquired by Issuing Preferred Stock

Peace Computer Corporation acquired 90 percent of Symbol Software Companys common stock on January 2, 20X3, by issuing preferred stock with a par value of $6 per share and a market value of $8.10 per share. A total of 10,000 shares of preferred stock was issued. Balance sheet data for the two companies immediately before the business combination are presented in E3-8.

Required: Prepare a consolidated balance sheet for the companies immediately after Peace obtains ownership of Symbol by issuing the preferred stock.

Symbol Software Company Book Value Fair Value Cash Other Assets Peace Computer Corporation Book Value Fair Value $200,000 $200,000 400,000 400,000 $600,000 $100,000 100,000 300,000 200,000 $600,000 $ 50,000 120,000 $170,000 $ 50,000 120,000 Total Debits 80,000 Current Liabilities Common Stock Retained Earnings $ 80,000 50,000 40,000 Total Credits $170,000