POPCORN Corporation acquired an 80 % interest in the outstanding stock of SALT Corporation for $520.000...

 

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POPCORN Corporation acquired an 80 % interest in the outstanding stock of SALT Corporation for $520.000 on 1/1/X1. At this time, the stockholders' equity of SALT consisted of $400,000 of capital stock and $50,000 of retained eamings. The following table represents only those assets and liabilities of Salt which had book values different than their fair values at the date of acquisition: Book Value Fair Value Inventory $ 20,000 $ 15,000 Sold X1 Land 30,000 40,000 Still owned Buildings 10,000 50,000 Remaining life 5 years Notes Payable (50,000) (40,000) Matures on 12/31/X4 Comparative Balance Sheets for POPCORN and SALT AT 12/31/X3 are presented here: Popcorn Salt Assets: Other Assets $318,000 $100,000 Inventory 100,000 50,000 Land 500,000 100,000 Buildings-net 1,500,000 580,000 Investment in Salt 658,800 Dividends Receivable 24,000 Advance Receivable from P 10,000 Total Assets $3,100,800 $840,000 Liabilities & Equity: Other Liabilities (includes notes pay) $500,000 $160,000 Dividends Payable 30,000 Advance Payable to Salt 10,000 Capital Stock 2,000,000 400,000 Retained Earnings 590.800 250,000 Total Liabilities and Equity $3,100,800 $840,000 POPCORN Corporation acquired an 80 % interest in the outstanding stock of SALT Corporation for $520.000 on 1/1/X1. At this time, the stockholders' equity of SALT consisted of $400,000 of capital stock and $50,000 of retained eamings. The following table represents only those assets and liabilities of Salt which had book values different than their fair values at the date of acquisition: Book Value Fair Value Inventory $ 20,000 $ 15,000 Sold X1 Land 30,000 40,000 Still owned Buildings 10,000 50,000 Remaining life 5 years Notes Payable (50,000) (40,000) Matures on 12/31/X4 Comparative Balance Sheets for POPCORN and SALT AT 12/31/X3 are presented here: Popcorn Salt Assets: Other Assets $318,000 $100,000 Inventory 100,000 50,000 Land 500,000 100,000 Buildings-net 1,500,000 580,000 Investment in Salt 658,800 Dividends Receivable 24,000 Advance Receivable from P 10,000 Total Assets $3,100,800 $840,000 Liabilities & Equity: Other Liabilities (includes notes pay) $500,000 $160,000 Dividends Payable 30,000 Advance Payable to Salt 10,000 Capital Stock 2,000,000 400,000 Retained Earnings 590.800 250,000 Total Liabilities and Equity $3,100,800 $840,000