Question

On July 31, 2011, Ping Company purchased 90% of Santos Company’s common stock for $2,010,000 cash. Immediately after the acquisition, the two companies’ balance sheets were as follows:


Santos Company has not yet recorded the $60,000 cash advance from Ping Company. Ping Company’s accounts receivable include $20,000 due from Santos Company. Santos Company’s $100,000 note payable is payable to Ping Company. Neither company has recorded $7,000 of interest accrued on the note from January 1 to July 31. Any difference between book value and the value implied by the purchase price relates to land.

Required:
Prepare a consolidated balance sheet workpaper on July 31,2011.


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  • CreatedMarch 13, 2015
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