Talbott Company purchased 80 percent of Short Company's stock on January 1, 20X8, at underlying book value.
Question:
Talbott Company purchased 80 percent of Short Company's stock on January 1, 20X8, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 20 percent of Short's book value. On December 31, 20X9, Short purchased 10 percent of Talbott's stock. Balance sheets for the two companies on December 31, 20X9, are as follows:
Required
Assuming that the treasury stock method is used in reporting Talbott’s shares held by Short, prepare a consolidated balance sheet worksheet and consolidated balance sheet for December 31,20X9.
TALBOTT COMPANY Condensed Balance Sheet December 31, 20X9 Cash Accounts Receivable Inventory Buildings & Equipment (net) Investment in Short Company Common Stock352.000 Total Assets $ 78,000 Accounts Payable 120,000 Bonds Payable 150,000 Common Stock 400,000 Retained Earnings 90,000 400,000 300,000 310,000 $1.100,000 Total Liabilities & Equities 1.100,000 SHORT COMPANY Condensed Balance Sheet December 31, 20X9 Cash Accounts Receivable Inventory Buildings & Equipment (net) Investment in Talbott Company Common Stock61,000 Total Assets S 39,000 Accounts Payable 80,000 Bonds Payable 120,000 Common Stock 300,000 Retained Earnings 60,000 100,000 200,000 240,000 $600,000 Total Liabilities & Equities 600,000
Step by Step Answer:
Common stock 200000 Retained earnings 240000 Investment in Short Co 352000 NCI in NA of Short Co 880...View the full answer
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
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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