UNIT 4 POST PROBLEM 1

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UNIT 4 POST PROBLEM 1 TEMPLATE
P CORPORATION AND S CO.
Working Paper for Consolidated Balance Sheet P Corporation
12/31/200X Consolidated Balance Sheet
Assets Liabilities and Equity
Entry to record the purchase of S Company: Compuation of Goodwill P S Cash Current Liabilities
Investment in S Company Corporation Company Debit Credit Consolidated Inventory Long Term debt
Cash S Company Net Assets at Book Value Assets Other Assets Noncontrolling Interest
Entry in the P Corporation General Ledger to Inventory S Company acquisition date fair value Cash Plant Common Stock 5 Par
record the purchase of 80% of S Company. Other Assets S Company acquisition date book value Inventories Paid In Capital
Plant Fair value in excess of book value Other Assets Goodwill Retained Earnings
Liabilities Fair value adjustments to: Investment in S Total Total
Cash Long Term Debt Plant
580,000 Net Assets at Book Inventory
Net Assets at Market Amount allocated to goodwill 115,000 Plant
Goodwill 115,000
Paid $300,000 for 80% Total Assets
Investment in S Co. Noncontrolling interest 20% Goodwill Allocation to Controlling and Noncontrolling Interest
Acquisition date fair value Total Controlling Noncontrolling
Fair Market Value Fair value at acquisition date Liabilities & Equity
ENTRIES ON CONSOLIDATION WORKSHEET Goodwill 115,000 Relative fair value of S Company net Current Liabilities
assets (80% and 20%) Long Term Debt
Consolidation Entry S: Goodwill 115,000 Noncontrolling Interest
Common Stock 75,000
Paid in Capital Controlling interest - 80% Common Stock $5 par
Retained Earnings (Beginning) Noncontrolling interest - 20% Noncontrolling Interest Common Stock $10 par
Investment in S Company Goodwill 115,000 20% of 260,000 + 23,000 goodwill = 75,000 Paid In Capital
Noncontrolling interest Retained Earnings
Eliminate subsidiary equity Total Liabilities & Equity
Consolidation Entry A:
Plant
Inventory
Goodwill
Investment in S Company
Noncontrolling interest
Allocate subsidiary acquisition date
fair value adjustments
Noncontrolling
75,000
52,000
23,000

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