Question

Your answer is partially correct. Try again. Prepare a consolidated balance sheet at the date of acquisition. (Round answers to o decimal places, e.g. 125. List assets in order of liquidity.) PRUNCE COMPANY AND SUBSIDIARY Consolidated Balance Sheet January 2, 2014 Assets Cash 160470 Accounts Receivable 166830 Inventory 171900 Plant and Equipment 488600 X Land 91770 X Total Assets Liabilities and Stockholders' Equity Liabilities Accounts Payable 156860 Mortgage Payable 104980 Total Liabilities 261840 Stockholders' Equity X 239410 Other Contributed Capital - Retained Earnings X 260660 Common Stock Noncontrolling Interest Total Stockholders' Equity X Total Liabilities and Stockholders' Equity

Exercise 3-3 On January 2, 2014, Prunce Company acquired 90% of the outstanding common stock of Sun Company for $180,700 cash. Just before the acquisition, the balance sheets of the two companies were as follows: Prunce Sun Cash $282,130 $ 59,040 Accounts receivable (net) 142,020 24,810 Inventory 118,670 53,230 Plant and equipment (net) 395,640 92,960 Land 62,550 29,220    Total asset $1,001,010 $259,260 Accounts payable $106,440 $ 50,420 Mortgage payable 67,320 37,660 Common stock, $2 par value 421,400 76,960 Other contributed capital 217,440 21,970 Retained earnings 188,410 72,250    Total equities $1,001,010 $259,260 The fair values of Sun Company’s assets and liabilities are equal to their book values with the exception of land.

(a) Your answer is correct. Prepare a journal entry to record the purchase of Sun Company’s common stock. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT Attempts: 2 of 5 used

(b) Your answer is partially correct. Try again. Prepare a consolidated balance sheet at the date of acquisition. (Round answers to 0 decimal places, e.g. 125. List assets in order of liquidity.) PRUNCE COMPANY AND SUBSIDIARY Consolidated Balance Sheet January 2, 2014For the Year Ended January 2, 2014For the Quarter Ended January 2, 2014 Assets $ $ $ $

Answer 1

Consolidated Balance Sheet 6) Reserves for 128410 Retained earnings Share post Acquisition Reserved Sun 188410 and its Balance Sheet D. Consolidated 7 q pounce Sun subsidiary 160470 166830 11900 cash (101430 + 59040) Accounts receivable (142020 + 24310) Inventory (19670+ 5 3730) piante equipmont (395640+92960) (625504 29220) 488600 91770 Land 76411 Goodwill 1155981 156860 104980 Accounts payable (106440750420) Mortgage payable (67320 + 37660) 421400 stock Common (217440+ 21970) 239416 other 188410 Contributed capital Retained casnings Non- Con Controlling Interest 14,921 1125981

Acquisition: January 2, 2014 D Date of 2) Shareholding pattern în Sun pounce 90% 10% Non-controlling interest 100% 3) Analysis of Retained earnings of Sun 72250 1 on date of Acquisition after date of Acquisition 72250 o prunce (90%) 65,025 Non-controming 2017 Interest 72.25 1 Goodwill / capital 4 calculation - 69264 of Reserve Share capital acquired in Sun pre Acquisition 65025 reserves 104289 Cost of Acquisition 180700 Goodwill 7641 5) Calculation of Interest Non Conto controlling Shave capital (10%) 7696 Share in Share in Reserves 7225 14,921

in hun Balance sheets after Acquisition of 90% stake pounce Sun Cash la1430 59040 Accounts Receivable 142020 24810 118670 53230 Inventory plant & equipment 92960 395640 Land 62550 29220 Investment in Sun 180700 1,001,000 259260 50420 106 440 Accounts payable . 67320 37660 Mortgage payable 421400 76960 Common stock 217440 21990 other Contributed capital 72250 188410 Retained earnings 1,00!010 259260 Journal entry 180700 Sun ale Investment in 180700 cash (Being Stock acquired in Sun)