Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At the date of acquisition, the fair value of the noncontrolling interest was equal to 25 percent of Saul's book value. The balance sheets of the two companies for January 1, 20X1, are as follows: Cash Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Investment in Saul Corporation Total Assets Cash Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Total Assets PENNY MANUFACTURING CORPORATION Balance Sheet January 1, 20X1 $ 238,500 Accounts Payable 76,000 Bonds Payable $ 119,250 394,000 100,000 Common Stock 185,000 608,000 Additional Paid-In Capital 35,000 (142,000) Retained Earnings 394,000 246,750 $1,127,250 Total Liabilities & Equities $1,127,250 SAUL CORPORATION Balance Sheet January 1, 20X1 $ 70,000 Accounts Payable $123,000 116,000 Bonds Payable 294,000 180,000 608,000 Common Stock ($10 par) 100,000 Additional Paid-In Capital 35,000 (228,000) Retained Earnings 194,000 $ 746,000 Total Liabilities & Equities $746,000 On January 2, 20X1, Penny purchased an additional 2,500 shares of common stock directly from Saul for $150,000. Required: a. Prepare the consolidation entry needed to complete a consolidated balance sheet worksheet immediately following the issuance of additional shares to Penny. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Answer is complete but not entirely correct. No Event A 1 Common stock Retained earnings Accounts Additional paid-in capital Investment in Saul Corporation NCI in NA of Saul Corporation Debit Credit 125,000 194,000 160,000 104,750 x 232,250 b. Prepare a consolidated balance sheet worksheet immediately following the issuance of additional shares to Penny. (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 is not complete. PENNY MANUFACTURING COMPANY AND SUBSIDIARY Consolidated Balance Sheet Worksheet January 1, 20X1 Consolidation Entries Penny Saul Corp. DR CR Consolidated Balance Sheet Assets Cash Accounts Receivable $ 238,500 x 70,000 76,000 116,000 $ 308,500 192,000 Inventory 100,000 108.000 x 208,000 Buildings and Equipment 608,000 608,000 1,216,000 Less: Accumulated Depreciation (142,000) (228,000) (370,000) Investment in Saul Corp. 104,750 (104,750) Total Assets $ 880,500 $ 674,000 S 0 $ 104,750 $ 1,440,750 Liabilities & Stockholders' Equity Accounts Payable $ 119,250 $123,000 $ 242,250 Bonds Payable 394,000 294,000 688,000 Common Stock 185,000 100,000 285,000 Additional Paid-In Capital 160,000 x 160,000 Retained Earnings 394,000 194.000 588,000 NCI in NA of Saul Corp. 232,250x 232,250 Total Liabilities & Stockholders' Equity $ 1,252,250 $ 711,000 S 0 $ 232,250 $ 2,195,500 Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At the date of acquisition, the fair value of the noncontrolling interest was equal to 25 percent of Saul's book value. The balance sheets of the two companies for January 1, 20X1, are as follows: Cash Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Investment in Saul Corporation Total Assets Cash Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Total Assets PENNY MANUFACTURING CORPORATION Balance Sheet January 1, 20X1 $ 238,500 Accounts Payable 76,000 Bonds Payable $ 119,250 394,000 100,000 Common Stock 185,000 608,000 Additional Paid-In Capital 35,000 (142,000) Retained Earnings 394,000 246,750 $1,127,250 Total Liabilities & Equities $1,127,250 SAUL CORPORATION Balance Sheet January 1, 20X1 $ 70,000 Accounts Payable $123,000 116,000 Bonds Payable 294,000 180,000 608,000 Common Stock ($10 par) 100,000 Additional Paid-In Capital 35,000 (228,000) Retained Earnings 194,000 $ 746,000 Total Liabilities & Equities $746,000 On January 2, 20X1, Penny purchased an additional 2,500 shares of common stock directly from Saul for $150,000. Required: a. Prepare the consolidation entry needed to complete a consolidated balance sheet worksheet immediately following the issuance of additional shares to Penny. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Answer is complete but not entirely correct. No Event A 1 Common stock Retained earnings Accounts Additional paid-in capital Investment in Saul Corporation NCI in NA of Saul Corporation Debit Credit 125,000 194,000 160,000 104,750 x 232,250 b. Prepare a consolidated balance sheet worksheet immediately following the issuance of additional shares to Penny. (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 is not complete. PENNY MANUFACTURING COMPANY AND SUBSIDIARY Consolidated Balance Sheet Worksheet January 1, 20X1 Consolidation Entries Penny Saul Corp. DR CR Consolidated Balance Sheet Assets Cash Accounts Receivable $ 238,500 x 70,000 76,000 116,000 $ 308,500 192,000 Inventory 100,000 108.000 x 208,000 Buildings and Equipment 608,000 608,000 1,216,000 Less: Accumulated Depreciation (142,000) (228,000) (370,000) Investment in Saul Corp. 104,750 (104,750) Total Assets $ 880,500 $ 674,000 S 0 $ 104,750 $ 1,440,750 Liabilities & Stockholders' Equity Accounts Payable $ 119,250 $123,000 $ 242,250 Bonds Payable 394,000 294,000 688,000 Common Stock 185,000 100,000 285,000 Additional Paid-In Capital 160,000 x 160,000 Retained Earnings 394,000 194.000 588,000 NCI in NA of Saul Corp. 232,250x 232,250 Total Liabilities & Stockholders' Equity $ 1,252,250 $ 711,000 S 0 $ 232,250 $ 2,195,500
Expert Answer:
Related Book For
Advanced Financial Accounting
ISBN: 9781260772135
13th Edition
Authors: Theodore Christensen, David Cottrell, Cassy Budd
Posted Date:
Students also viewed these accounting questions
-
1. Use the transformation matrices to rotate the point (-6,3) by 128 degrees in the clockwise direction. Plot the point before and after. 2. Use the transformation matrices to move the point (3,-4)....
-
On December 31, 2019, Metlock Inc. borrowed $3,300,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this...
-
Mary Ann Singleton was the librarian at a maximum security prison located in Tazewell County, Virginia. About four times a week, Gene Shinault, assistant warden for operations, insistently...
-
Simon Company's year-end balance sheets follow. At December 31 Assets Cash Current Year 1 Year Ago 2 Years Ago Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total...
-
The Football Bowl Subdivision (FBS) level of the National Collegiate Athletic Association (NCAA) consists of over 100 schools. Most of these schools belong to one of several conferences, or...
-
Opportunity costs. The Wolverine Corporation is working at full production capacity producing 10,000 units of a unique product Rosebo. Manufacturing cost per unit for Rosebo is as follows:...
-
Oriole Company has the following production data for selected months. Ending Work in Process Beginning Month Work in Process Units Transferred Out % Complete as to Units Conversion Cost January -0-...
-
Investment X offers to pay you $5,300 per year for eight years, whereas Investment Y offers to pay you $7,300 per year for five years. Which of these cash flow streams has the higher present value if...
-
A) Find the values of:- (2-i)(-2+ 3i) (-1 2i )(2 +i) B) Find the three cube roots of 1. Find the two square roots of i.
-
Expected future prices of components of a product to be assembled is an example of which element?
-
Prince Naveen goes grocery shopping and carelessly leaves his checkbook in his cart. His checkbook had two blank checks remaining. The checkbook is stolen by Facilier. On June 5, Facilier forges...
-
What element is the number of units of a specific product to be manufactured an example of?
-
Dales consulting services completed a contract with an organization located overseas.dale in-cluded the revenue on the income statement without converting the foreign currency to Canadian dollars.is...
-
Wade Inc. granted a non-qualified stock option for 100 shares at $50 per share to Mary, an employee, on May 1, Year 1. On that date, the option was selling on an established market for $4 per share....
-
Write a paper on psychology as a driving force for social change better that psychology as a profession? As the applications of psychology emerged, the use of psychology as a force for positive...
-
Record the following selected transactions for March in a two-column journal, identifying each entry by letter: (a) Received $10,000 from Shirley Knowles, owner. (b) Purchased equipment for $35,000,...
-
Give a comprehensive definition of auditing.
-
State the major changes which have occurred in auditing techniques during the last 160 years. Explain briefly how changes in technology have impacted on the changes in auditing techniques.
-
Under the provisions of the Companies Act 1985 an auditor's report must be attached to a company's financial statements. Is this true for all companies? Explain.
Study smarter with the SolutionInn App