On December 31, 2011, Pen Corporation purchased 80 percent of the stock of Sut Company at book
Question:
Pen Sut
Assets
Cash ............................................ $ 128 ...................... $ 72
Accounts receivable ............................ 180 ...................... 136
Inventories ....................................... 572 ...................... 224
Investment in Sut ............................... 800
Equipment-net .............................. 1,520 ................... 700
$3,200 $1,132
Liabilities and Stockholders' Equity
Accounts payable ............................. $ 160 ..................... $ 132
Common stock, $20 par ..................... 1,840 ........................ 600
Retained earnings ............................ 1,200 ...................... 400
$3,200 $1,132
REQUIRED
1. Prepare a consolidated balance sheet for Pen Corporation and Subsidiary at December 31, 2011.
2. Compute consolidated net income for 2012 assuming that Pen Corporation reported separate income of $680,000 and Sut Company reported net income of $360,000. (Separate incomes do not include income from the investment in Sut.)
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For
Advanced Accounting
ISBN: 978-0133451863
12th edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
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