Question

Free Answer (8 pts) 1.On December 31, 20X8, Parkway Corporation acquired 80 percent of Street Company's common stock for $104,000 cash. The fair value of the noncontrolling interest at that date was determined to be $26,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Df P- V 130- 45 130,000 Tate Street Parkway Corp $ Company 20,000 35,000 40,000 60,000 100,000 (40,000) Cash Accounts Receivable 90,000 80,000 100,000 40,000 300,000 (100,000) 104,000 $ 614,000 120,000 200,000 50,000 244,000 $614,000 iou CoGs Inventory Land 10o,0b0 Buildings and Equipment Less: Accumulated Depreciation Investment in Street Company $ 215,000 30,000 100,000 25,000 60,000 $ 215,000 Total Assets Accounts Payable Mortgage Payable Common Stock Retained Earnings Total Liabilities and Equity On that date, the book values of Street's assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and buildings and equipment, which had a fair value of $100,000. Required: 1) Provide the consolidating entries needed to prepare a consolidated balance sheet immediately following the business combination. (3 pts)

Answer 1

ACCOUNT DESCRIPTION	DEBIT	CREDIT
Cash	$     20,000
Accounts receivable	$     35,000
Inventory	$     45,000
Property, plant, and equipment	$ 1,00,000
Goodwill	$     60,000
ACCOUNTS PAYABLE		$     30,000
Mortgage Payable		$ 1,00,000
Cash		$ 1,04,000
Non controlling interest		$     26,000
	$ 2,60,000	$ 2,60,000