Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $207,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:

Item	Blank Corporation				Faith Corporation
Assets
Cash		$	62,000			$	34,000
Accounts Receivable			81,000				39,000
Inventory			103,000				75,000
Buildings and Equipment (net)			212,000				160,000
Investment in Faith Corporation Stock			207,000
Total Assets		$	665,000			$	308,000
Liabilities and Stockholders’ Equity
Accounts Payable		$	84,000			$	29,000
Notes Payable			146,000				72,000
Common Stock			83,000				57,000
Retained Earnings			352,000				150,000
Total Liabilities and Stockholders’ Equity		$	665,000			$	308,000

At the date of the business combination, the book values of Faith’s net assets and liabilities approximated fair value. Assume Faith Corporation’s accumulated depreciation on buildings and equipment on the acquisition date was $15,000.

Required:
a. Give the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
  

b. Prepare a consolidated balance sheet worksheet. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)

Answer rating: 100% (QA)

Consolidation Entry for a Consolidated Balance Sheet a The consolidation entry needed to prepare a consolidated balance sheet immediately following th... View the full answer