UNIT 4 POST PROBLEM 1
xoon
unit_4__post_problem_11.doc|
UNIT 4 POST PROBLEM 1 |
||||
|
|
|
|
|
|
|
On December 31, 200X P Corporation paid $300,000 cash for 80% of the |
||||
|
common stock of S Company which becomes a subsidiary. Following |
||||
|
information is shown prior to the acquisition being recorded: |
||||
|
|
|
|
|
|
|
P Company |
||||
|
Assets |
|
Liabilities and Equity |
||
|
Cash |
580,000 |
|
Liabilities |
90,000 |
|
Inventories |
60,000 |
|
|
|
|
Plant |
340,000 |
|
Common Stock, $5pv |
100,000 |
|
|
|
|
Paid in Capital |
200,000 |
|
|
|
|
Retained Earnings |
590,000 |
|
Total |
980,000 |
|
Total |
980,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
S Company |
||||
|
Assets |
|
Liabilities and Equity |
||
|
Inventories |
20,000 |
|
Liabilities |
30,000 |
|
Other assets |
40,000 |
|
Long Term Debt |
50,000 |
|
Plant |
140,000 |
|
Common Stock, $10pv |
40,000 |
|
|
|
|
Paid in Capital |
20,000 |
|
|
|
|
Retained Earnings |
60,000 |
|
Total |
200,000 |
|
Total |
200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
S market values are: |
|
|
|
|
|
|
Plant |
|
$250,000 |
|
|
|
Inventory |
|
$50,000 |
|
|
|
|
|
|
|
|
1. Prepare the entries in journal format to record the acquisition |
||||
|
and post to the general edger accounts. |
|
|||
|
2. Prepare a consolidation workpaper. |
|
|||
|
3. Prepare consolidated balance sheet. |
|
