Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the date of
Question:
Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the date of acquisition, Scrub Company reported assets and liabilities with book values of $420,000 and $165,000, respectively, common stock outstanding of $80,000, and retained earnings of $175,000. The book values and fair values of Scrub’s assets and liabilities were identical except for land, which had increased in value by $20,000, and inventories, which had decreased by $7,000.
Required
Give the consolidation entries required to prepare a consolidated balance sheet immediately after the business combination assuming Power acquired its ownership of Scrub for
a. $280,000.
b. $251,000.
Step by Step Answer:
a Ownership acquired for 280000 b Ownership acquired for 251000 Equitymethod Entrie...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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