Unit 2 extra problem

Unit 2 extra problem

Attachment 1

Attachment 2

ATTACHMENT PREVIEW

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C.
CONSOLIDATION WORKSHEET
P CORPORATION AND S CO.
P CORPORATION
WORKING PAPER FOR CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET
6/30/200X
AS OF JUNE 30, 200X
Assets
Liabilities and Equity
P
S
Eliminations &
Debit
Cash
Current Liabilities
Corporation
Company
Adjustments
Credit
Consolidated
Inventory
Long Term debt
Assets
Other Assets
Cash
Plant
Common Stock 5 Par
Inventories
debit
Paid In Capital
Other Assets
Goodwill
Retained Earnings
Investment in S
credit
Total
Total
Plant
debit
Goodwill
debit
Total Assets
Liabilities & Equity
Current Liabilities
Long Term Debt
Common Stock $5 par
Common Stock $10 par
debit
Paid In Capital
debit
Retained Earnings
debit
Total Liabilities & Equity

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ADVANCED ACCOUNTING UNIT 2 POST PROBLEM – SEPARATE SUBSIDIARY
On June 30, 200X P paid $375,000 cash for 100% of the Common Stock of S Company.
The
transaction is an acquisition of wherein the acquired company is not dissolved.
S Company is
maintained as a separate subsidiary of P Company.
It is still an entity, but in this case P
Company owns all of it’s stock.
Following information is shown
prior
to acquisition being recorded:
P Company
Assets
Liabilities and Capital
Cash
$580,000
Current Liabilities
$90,000
Inventories
60,000
Common Stock $5PV
100,000
Plant Assets
340,000
Additional Paid in Capital
200,000
Retained Earnings
590,000
Total
$980,000
Total
$980,000
S Company
Assets
Liabilities and Capital
Inventories
$ 20,000
Current Liabilities
$30,000
Other Assets
40,000
Long Term Liabilities
50,000
Plant Assets
140,000
Common Stock $10 PV
40,000
Additional Paid in Capital
20,000
Retained Earnings
60,000
Total
$200,000
Total
$200,000
Differences between identifiable net assets of S Company were:
Current Fair Value
Book Value
Difference
Inventories
$50,000
$20,000
$30,000
Plant
250,000
140,000
110,000
A.
Prepare the journal entries showing the purchase
B.
Prepare a schedule showing the amount of goodwill from this purchase.
C
Prepare a consolidation worksheet showing the eliminations.
D.
Prepare a consolidated balance sheet AS OF June 30, 200X using the consolidation
worksheet as a basis.

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