Question
Winter Inc, purchased 80% of the stock of Spring on January 1, 2020, for $1, 200,000. Winter did not pay a control premium. At the
Winter Inc, purchased 80% of the stock of Spring on January 1, 2020, for $1, 200,000. Winter did not pay a control premium.
At the date of acquisition Spring reported the following balance sheet amounts
Assets
Liabilities & Equity
Cash$360,000
Accounts Payable$800,000
Receivables
240,000
Total liabilities
800,000
Land
180,000
Common Stock
300,000
Buildings (net)
920,000
Retained earnings
600,000
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Total Equity
900,000
Total Assets$850,000
Total Liabilities & Stockholders' Equity$900,000
Spring 's land had a fair value of $4800,000 on January 1,2020. All of the other identifiable assets and liabilities of Spring had fair values equal to their book values.
Winter Inc, had the following select balances on its separate balance sheet at date of acquisition
Land: $424,000
Goodwill: none
Common stock: $1,280,000
1. What will Winter record as Investment in Spring on its separate financial statements prepared immediately after the acquisition?
Find the amount in the balance sheet accounts in the CONSOLIDATED financial statements that are prepared on the date of acquisition.
2. Land account?
3. Goodwill account?
4. Common stock account?
5. Investment in Spring account?
6. Noncontrolling interest account
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