On June 10, 20X8, Playoff Corporation acquired 100 percent of Series Companys common stock. Summarized balance sheet
Question:
On June 10, 20X8, Playoff Corporation acquired 100 percent of Series Company’s common stock. Summarized balance sheet data for the two companies immediately after the stock acquisition are as follows:
Required
a. Give the consolidation entries required to prepare a consolidated balance sheet immediately after the acquisition of Series Company shares.
b. Explain how consolidation entries differ from other types of journal entries recorded in the normal course of business.
Item Cash Accounts Receivable Inventory Buildings & Equipment (net) Investment in Series Company Total Accounts Payable Bonds Payable Common Stock Retained Earnings Total Playoff Corp. $ 15,000 30,000 80,000 120,000 100,000 $345,000 $ 25,000 150,000 55,000 115,000 $345,000 Series Company Book Value $ 5,000 10,000 20,000 50,000 $85,000 $ 3,000 25,000 20,000 37,000 $85,000 Fair Value $ 5,000 10,000 25,000 70,000 $110,000 $ 3,000 25,000 $ 28,000
Step by Step Answer:
a Equitymethod Entries on Playoff Corps Books Record the initia...View the full answer
Advanced Financial Accounting
ISBN: 9781260772135
13th Edition
Authors: Theodore Christensen, David Cottrell, Cassy Budd
Related Video
This video is about ways to attempt consolidated balance sheet questions. since the unconsolidated financial statements of parent and subsidiary companies are prepared separately, consolidating the balance sheets of both companies is critical and sometimes becomes complex. the tutorial will guide students on to how questions on attempting questions on consolidated financial statements in an easier yet more effective way.
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