Question

Pot Inc. acquired all Seed Inc.'s outstanding $29 par common stock on December 31, 20X3, in exchange for 42,000 shares of its $29 par common stock. Pot's common stock closed at $56.50 per share on a national stock exchange on December 31, 20X3. Both corporations continued to operate as separate businesses maintaining separate accounting records with years ending December 31. On December 31, 20X4, after year-end adjustments and the closing of nominal accounts, the companies had condensed balance sheet accounts. Pot Inc. Seed Inc. Assets Cash Accounts & Other Receivables Inventories Land Depreciable Assets (net) Investment in Seed Inc. Long-Term Investments & Other Assets Total Assets $ 825,000 2,160,000 2,328,000 652,000 4,587,000 2,703,000 881,000 $14, 136,000 $ 332,000 842,000 1,052,000 305,000 1,986,000 391,000 $4,908,000 Liabilities and Stockholders' Equity Accounts Payable and Other Current Liabilities $ 2,462,000 Long-Term Debt 1,884,000 Common Stock, $29 Par Value 3,410,000 Additional Paid-In Capital 1,155,000 Retained Earnings 5,225,000 Total Liabilities and Stockholders' Equity $14, 136,000 $1,126,000 1,299,000 1,218,000 183,000 1,082,000 $4,908,000 Additional Information 1. Pot uses the equity-method of accounting for its investment in Seed. 2. On December 31, 20X3, Seed's assets and liabilities had fair values equal to the book balances with the exception of land, which had a fair value of $525,000. Seed had no land transactions in 20X4. 3. On June 15, 20X4, Seed paid a cash dividend of $6 per share on its common stock. 4. On December 10, 20X4, Pot paid a cash dividend totaling $265,000 on its common stock. 5. On December 31, 20X3, immediately before the combination, the stockholders' equity balance was: Common Stock Additional Paid-In Capital Retained Earnings Pot Inc. $2,192,000 1,655,000 4,009,000 $7,856,000 Seed Inc. $1,218,000 183,000 752,000 $2,153,000 6. The 20x4 net income amounts according to the separate books of Pot and Seed were $899,000 (exclusive of equity in Seed's earnings) and $582,000, respectively.

Answer 1

I seed ANSWER:- pot en Inc. Prey Inc. Consolidated Balance sheet workpaper Dec 31, 2014 ed I eliminations Inc. 2882500 Item | Inc. | Dr. I cr. consolidate cash 838000 336000 1174 DUO Accounts receivable 2156000 843000 29,99000 Inventory 2317000 1062000 337-9000 Land 667000 313000 387500 1367500 Depreciable assets(net) 4583000 1982.000 6565000 Inv. in seed Inc. 2882500 I Long term- Inv. &other 865000 388000 1253000 assets Differential 387500 387500 Total Debts 14308500 4924000 16237500 Accounts payable & other 3606000 current liabilities 2464000/1142000 3179000 long term Debt 1892000 | 1287000 3433000 common stock $29par 3433000 1247000 lekovo 1225560ng Additional paid-in capital 1225500 175000 19.5000 Retained Earnings 5294000 1073000 1073000 5294000 Total credits 14308500 4924000 32700003270000 1673 7.500