Pool Company purchased 90% of the outstanding common stock of Spruce Company on December 31, 2014,...
Pool Company purchased 90% of the outstanding common stock of
Spruce Company on December 31, 2014, for cash. At that time the
balance sheet of Spruce Company was as follows:
| Current assets | $1,135,400 | |
| Plant and equipment | 1,069,190 | |
| Land | 175,250 | |
| Total assets | $2,379,840 | |
| Liabilities | $830,150 | |
| Common stock, $20 par value | 825,300 | |
| Other contributed capital | 441,330 | |
| Retained earnings | 377,560 | |
| Total | 2,474,340 | |
| Less treasury stock at cost, 4,725 shares | 94,500 | |
| Total equities | $2,379,840 |
Prepare the elimination entry required for the preparation of a consolidated balance sheet workpaper on December 31, 2014, assuming the purchase price of the stock was $1,218,920. Assume that the subsidiary land has a fair value of $184,830, and the other assets and liabilities are fairly valued.
Homework Answers
Ans:
|
Journal Entry |
|||
|
Date |
Accounts Title |
Debit |
Credit |
|
Common Stock |
$825300 |
||
|
Other Contribution Capital |
$441,330 |
||
|
Retained Earning |
$377,560 |
||
|
Land ($184,830-$175,250) |
$9,580 |
||
|
Investment in Spruce Company |
$1,218,920 |
||
|
Non Controlling Interest ($1,218,920/0.90*0.10) |
$135,436 |
||
|
Treasury Stock |
$94,500 |
||
|
Gain on Purchase of Business -Pool |
$204,914 |
||
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Pool Company purchased 90% of the outstanding common stock of
Spruce Company on December 31, 2014,...
Exercise 3-3 On January 2, 2014, Prunce Company acquired 90% of the outstanding common stock of...
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...
Problem 4-7 Price Company purchased 90% of the outstanding common stock of Score Company on January...
Problem 4-7 Price Company purchased 90% of the outstanding common stock of Score Company on January 1, 2011, for $445,950. At that time, Score Company had stockholders' equity consisting of common stock, $201,100; other contributed capital, $158,500; and retained earnings, $89,500. On December 31, 2015, trial balances for Price Company and Score Company were as follows: Cash Accounts Receivable Note Receivable Inventory Investment in Score Company Plant and Equipment Land Dividends Declared Cost of Goods Sold Other Expenses Total Debits...
Exercise 3-6 On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The...
Exercise 3-6
On December 31, 2013, Price Company purchased a controlling
interest in Shipley Company. The balance sheet of Price Company and
the consolidated balance sheet on December 3, 2013, were as
follows:
Price Company
Consolidated
Cash
$23,140
$40,992
Accounts receivable
36,350
52,500
Inventory
123,490
151,399
Investment in Shipley Company
216,430
—0—
Plant and equipment (net)
174,540
331,390
Land
110,290
223,723
Total
$684,240
$800,004
Accounts payable
$42,480
$120,050
Note payable
99,100
99,100
Noncontrolling interest in Shipley Company
—0—
38,194
Common...
Exercise 3-3 On January 2, 2014, Prunce Company acquired 90% of the outstanding common stock of...
Exercise 3-3
On January 2, 2014, Prunce Company acquired 90% of the outstanding
common stock of Sun Company for $178,050 cash. Just before the
acquisition, the balance sheets of the two companies were as
follows:
Prunce
Sun
Cash
$263,470
$ 60,730
Accounts receivable (net)
143,210
22,500
Inventory
110,480
56,650
Plant and equipment (net)
414,170
101,680
Land
59,220
29,600
Total asset
$990,550
$271,160
Accounts payable
$111,630
$ 50,670
Mortgage payable
67,840
40,000
Common stock, $2 par value
416,700
69,670
Other contributed...
Exercise 3-6 On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The...
Exercise 3-6
On December 31, 2013, Price Company purchased a controlling
interest in Shipley Company. The balance sheet of Price Company and
the consolidated balance sheet on December 3, 2013, were as
follows:
Price Company
Consolidated
Cash
$23,140
$40,992
Accounts receivable
36,350
52,500
Inventory
123,490
151,399
Investment in Shipley Company
216,430
—0—
Plant and equipment (net)
174,540
331,390
Land
110,290
223,723
Total
$684,240
$800,004
Accounts payable
$42,480
$120,050
Note payable
99,100
99,100
Noncontrolling interest in Shipley Company
—0—
38,194
Common...
Exercise 4-5 On January 1, 2014, Plate Company purchased a 90% interest in the common stock...
Exercise 4-5 On January 1, 2014, Plate Company purchased a 90% interest in the common stock of Set Company for $597,840, an amount $20,400 in excess of the book value of equity acquired. The excess relates to the understatement of Set Company's land holdings. Excerpts from the consolidated retained earnings section of the consolidated statements workpaper for the year ended December 31, 2014, follow: 1/1/14 retained earnings Net income from above Set Company 171,200 119,700 (50,300 ) 240,600 Consolidated Balances...
Exercise 3-6 On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The...
Exercise 3-6
On December 31, 2013, Price Company purchased a controlling
interest in Shipley Company. The balance sheet of Price Company and
the consolidated balance sheet on December 3, 2013, were as
follows:
Price Company
Consolidated
Cash
$22,960
$40,015
Accounts receivable
31,920
59,330
Inventory
121,760
175,450
Investment in Shipley Company
193,560
—0—
Plant and equipment (net)
199,520
320,530
Land
123,190
205,993
Total
$692,910
$801,318
Accounts payable
$41,610
$115,860
Note payable
97,900
97,900
Noncontrolling interest in Shipley Company
—0—
34,158
Common...
Plexi Company purchased 85% of the outstanding common stock of Senor Company on January 1, 2009...
Plexi Company purchased 85% of the outstanding common stock of Senor Company on January 1, 2009 for $57000. NOTE: COST METHOD USED BY PARENT Debit Jan. 1, 2009 Investment in Subsidiary-Sesnor 5,700,000 $ 5,700,000 The Sesnor Company balance aheet on 1/1/09 and 12/31/12 are as follows: Fair Value 120,000 $260,000 350,000 $ 450,000 1,275,000 $ 950,000 3,200,000 $ 3,450,000 1,000,000 1,000,000 250,000 120,000 $ 350,000 $1275,000 3,200,000 $2,500,000 Cash Accounts Receivable Net Plant Assets Other Assets $ 1,500,000 Total Assets...
Exercise 3-6 On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The...
Exercise 3-6 On December 31, 2013, Price Company purchased a controlling interest in Shipley Company. The balance sheet of Price Company and the consolidated balance sheet on December 3, 2013, were as follows: Price Company Consolidated Cash $22,960 $40,015 Accounts receivable 31,920 59,330 Inventory 121,760 175,450 Investment in Shipley Company 193,560 —0— Plant and equipment (net) 199,520 320,530 Land 123,190 205,993 Total $692,910 $801,318 Accounts payable $41,610 $115,860 Note payable 97,900 97,900 Noncontrolling interest in Shipley Company —0— 34,158 Common...
Plexi Company purchased 85% of the outstanding common stock of Sesnor Company on January 1, 2009...
Plexi Company purchased 85% of the outstanding common stock of Sesnor Company on January 1, 2009 for ss,70am NOTE COST METHOD USED BY PARENT Credit REAL Entn Jan. 1, 2009 Investment in Subsidiary -Sesnor 5,700,000 $ 5,700,000 The Sesnor Company bslance shet on i/i/09 and 12/31/12 are as follows: Fair Value 120,000 $ 260,000 350,000 450,000 1,275,000 $ 950,000 3200,000 $ 3,450,000 1,000,000 1,000,000 120,000 $ 350,000 1,275,000 $3,200,000 $2,500,000 Accounts Recelvable Net Plant Assets 1,500,000 Other Assets Total Assets...
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...
Problem 4-7 Price Company purchased 90% of the outstanding common stock of Score Company on January 1, 2011, for $445,950. At that time, Score Company had stockholders' equity consisting of common stock, $201,100; other contributed capital, $158,500; and retained earnings, $89,500. On December 31, 2015, trial balances for Price Company and Score Company were as follows: Cash Accounts Receivable Note Receivable Inventory Investment in Score Company Plant and Equipment Land Dividends Declared Cost of Goods Sold Other Expenses Total Debits...
Exercise 3-6
On December 31, 2013, Price Company purchased a controlling
interest in Shipley Company. The balance sheet of Price Company and
the consolidated balance sheet on December 3, 2013, were as
follows:
Price Company
Consolidated
Cash
$23,140
$40,992
Accounts receivable
36,350
52,500
Inventory
123,490
151,399
Investment in Shipley Company
216,430
—0—
Plant and equipment (net)
174,540
331,390
Land
110,290
223,723
Total
$684,240
$800,004
Accounts payable
$42,480
$120,050
Note payable
99,100
99,100
Noncontrolling interest in Shipley Company
—0—
38,194
Common...
Exercise 3-3
On January 2, 2014, Prunce Company acquired 90% of the outstanding
common stock of Sun Company for $178,050 cash. Just before the
acquisition, the balance sheets of the two companies were as
follows:
Prunce
Sun
Cash
$263,470
$ 60,730
Accounts receivable (net)
143,210
22,500
Inventory
110,480
56,650
Plant and equipment (net)
414,170
101,680
Land
59,220
29,600
Total asset
$990,550
$271,160
Accounts payable
$111,630
$ 50,670
Mortgage payable
67,840
40,000
Common stock, $2 par value
416,700
69,670
Other contributed...
Exercise 3-6
On December 31, 2013, Price Company purchased a controlling
interest in Shipley Company. The balance sheet of Price Company and
the consolidated balance sheet on December 3, 2013, were as
follows:
Price Company
Consolidated
Cash
$23,140
$40,992
Accounts receivable
36,350
52,500
Inventory
123,490
151,399
Investment in Shipley Company
216,430
—0—
Plant and equipment (net)
174,540
331,390
Land
110,290
223,723
Total
$684,240
$800,004
Accounts payable
$42,480
$120,050
Note payable
99,100
99,100
Noncontrolling interest in Shipley Company
—0—
38,194
Common...
Exercise 4-5 On January 1, 2014, Plate Company purchased a 90% interest in the common stock of Set Company for $597,840, an amount $20,400 in excess of the book value of equity acquired. The excess relates to the understatement of Set Company's land holdings. Excerpts from the consolidated retained earnings section of the consolidated statements workpaper for the year ended December 31, 2014, follow: 1/1/14 retained earnings Net income from above Set Company 171,200 119,700 (50,300 ) 240,600 Consolidated Balances...
Exercise 3-6
On December 31, 2013, Price Company purchased a controlling
interest in Shipley Company. The balance sheet of Price Company and
the consolidated balance sheet on December 3, 2013, were as
follows:
Price Company
Consolidated
Cash
$22,960
$40,015
Accounts receivable
31,920
59,330
Inventory
121,760
175,450
Investment in Shipley Company
193,560
—0—
Plant and equipment (net)
199,520
320,530
Land
123,190
205,993
Total
$692,910
$801,318
Accounts payable
$41,610
$115,860
Note payable
97,900
97,900
Noncontrolling interest in Shipley Company
—0—
34,158
Common...
Plexi Company purchased 85% of the outstanding common stock of Senor Company on January 1, 2009 for $57000. NOTE: COST METHOD USED BY PARENT Debit Jan. 1, 2009 Investment in Subsidiary-Sesnor 5,700,000 $ 5,700,000 The Sesnor Company balance aheet on 1/1/09 and 12/31/12 are as follows: Fair Value 120,000 $260,000 350,000 $ 450,000 1,275,000 $ 950,000 3,200,000 $ 3,450,000 1,000,000 1,000,000 250,000 120,000 $ 350,000 $1275,000 3,200,000 $2,500,000 Cash Accounts Receivable Net Plant Assets Other Assets $ 1,500,000 Total Assets...
Plexi Company purchased 85% of the outstanding common stock of Sesnor Company on January 1, 2009 for ss,70am NOTE COST METHOD USED BY PARENT Credit REAL Entn Jan. 1, 2009 Investment in Subsidiary -Sesnor 5,700,000 $ 5,700,000 The Sesnor Company bslance shet on i/i/09 and 12/31/12 are as follows: Fair Value 120,000 $ 260,000 350,000 450,000 1,275,000 $ 950,000 3200,000 $ 3,450,000 1,000,000 1,000,000 120,000 $ 350,000 1,275,000 $3,200,000 $2,500,000 Accounts Recelvable Net Plant Assets 1,500,000 Other Assets Total Assets...
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