E3.1 Combination and Consolidation Below are the condensed balance sheets of Princecraft and Sylvan Companies at...

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E3.1 Combination and Consolidation Below are the condensed balance sheets of Princecraft and Sylvan Companies at December 31, 2012. On January 1, 2013, Princecraft acquired all of the voting shares of Sylvan by issuing 400,000 shares of its $1 par value common stock. Princecraft's stock is currently trading at $120 in an active market. The book values of Sylvan Company's net assets approximate fair value. Balance Sheets C. Total assets Total liabilities. Common stock. Additional paid-in capital Retained earnings Total liabilities and equity. Princecraft Sylvan Company Company $150,000,000 $25,000,000 $ 30,000,000 $ 8,000,000 15,000,000 5,000,000 45,000,000 10,000,000 60,000,000 2,000,000 $150,000,000 $25,000,000 LO S Required a. Prepare the journal entry Princecraft makes to record the business combination as a stock acquisition. b. Prepare the eliminating entries necessary to consolidate the balance sheets of Princecraft Company- and Sylvan Company on January 1, 2013. Present the consolidated balance sheet at January 1, 2013. Compa- E3.1 Combination and Consolidation Below are the condensed balance sheets of Princecraft and Sylvan Companies at December 31, 2012. On January 1, 2013, Princecraft acquired all of the voting shares of Sylvan by issuing 400,000 shares of its $1 par value common stock. Princecraft's stock is currently trading at $120 in an active market. The book values of Sylvan Company's net assets approximate fair value. Balance Sheets C. Total assets Total liabilities. Common stock. Additional paid-in capital Retained earnings Total liabilities and equity. Princecraft Sylvan Company Company $150,000,000 $25,000,000 $ 30,000,000 $ 8,000,000 15,000,000 5,000,000 45,000,000 10,000,000 60,000,000 2,000,000 $150,000,000 $25,000,000 LO S Required a. Prepare the journal entry Princecraft makes to record the business combination as a stock acquisition. b. Prepare the eliminating entries necessary to consolidate the balance sheets of Princecraft Company- and Sylvan Company on January 1, 2013. Present the consolidated balance sheet at January 1, 2013. Compa-

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Solution Net asset value of sylvan Total asset Tot... View the full answer