On January 2, 20X8, Total Corporation acquired 75 percent of Ticken Tie Company’s outstanding common stock. In exchange for Ticken Tie’s stock, Total issued bonds payable with a par value of $500,000 and fair value of $510,000 directly to the selling stockholders of Ticken Tie. At that date, the fair value of the noncontrolling interest was $170,000. The two companies continued to operate as separate entities subsequent to the combination. Immediately prior to the combination, the book values and fair values of the companies’ assets and liabilities were as follows:

At the date of combination, Ticken Tie owed Total $6,000 plus accrued interest of $500 on a shortterm note. Both companies have properly recorded these amounts.

a. Record the business combination on the books of Total Corporation.
b. Present in general journal form all elimination entries needed in a worksheet to prepare a consolidated balance sheet immediately following the business combination on January 2, 20X8.
c. Prepare and complete a consolidated balance sheet worksheet as of January 2, 20X8, immediately following the business combination.
d. Present a consolidated balance sheet for Total and its subsidiary as of January 2,20X8.

  • CreatedMay 23, 2014
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