Neal Company purchased all the outstanding common stock of Wheaton Company on December 31, 1996. Just before the purchase, the condensed balance sheets of the two companies were as follows:

Neal used current assets of \(\$ 726,000\) to acquire the stock of Wheaton. The excess of this purchase price over the book value of Wheaton's net assets is determined to be attributable \(\$ 30,000\) to Wheaton's plant and equipment and the remainder to goodwill.
\section*{Instructions}

(a) Prepare the entry for Neal Company's acquisition of Wheaton Company stock.

(b) Prepare a consolidated work sheet at December 31, 1996.

(c) Prepare a consolidated balance sheet at December 31, 1996.

Transcribed Image Text:

Neal Company Wheaton Company $1,476,000 Current assets Plant and equipment (net) Current liabilities Common stock Retained earnings 1,882,000 $3,358,000 $ 868,000 1,947,000 543,000 $3,358,000 $379,000 353,000 $732,000 $ 92,000 360,000 280,000 $732,000