Case Inc. acquired all Frey Inc.€™s outstanding $25 par common stock on December 31, 20X3, in exchange for 40,000 shares of its $25 par common stock. Case€™s common stock closed at $56.50 per share on a national stock exchange on December 31, 20X3. Both corporations continued to operate as separate businesses maintaining separate accounting records with years ending December 31.
On December 31, 20X4, after year-end adjustments and the closing of nominal accounts, the companies had condensed balance sheet accounts (below).
Additional Information
1. Case uses the equity method of accounting for its investment in Frey.
2. On December 31, 20X3, Frey€™s assets and liabilities had fair values equal to the book balances with the exception of land, which had a fair value of $550,000. Frey had no land transactions in 20X4.
3. On June 15, 20X4, Frey paid a cash dividend of $4 per share on its common stock.
4. On December 10, 20X4, Case paid a cash dividend totaling $256,000 on its common stock.
5. On December 31, 20X3, immediately before the combination, the stockholders€™ equity balance was:

6. The 20X4 net income amounts according to the separate books of Case and Frey were $890,000 (exclusive of equity in Frey€™s earnings) and $580,000, respectively.

Liabilities

Required
Prepare a consolidated balance sheet worksheet for Case and its subsidiary, Frey, for December 31, 20X4. A formal consolidated balance sheet is notrequired.

Transcribed Image Text:

Case Inc. Frey Inc $2,200,000 $1,000,000 Common Stock Additional Paid-In Ca Retained Earnings ,660,000 190,000 820,000 3,166,000 $7,026,000 $2,010,000 Case Inc. Frey Inc. Assets Cash Accounts & Other Receivables Inventories Land Depreciable Assets (net) Investment in Frey Inc Long-Term Investments & Other Assets S 825,000 2,140,000 2,310,000 650,000 4,575,000 2,680,000 865,000 $14,045,000 $ 330,000 835,000 1,045,000 300,000 1,980,000 2 385,000 $4,875,000 Total Assets Liabilities & Stockholders' Equity Accounts Payable & Other Current Liabilities Long-Term Debt Common Stock, $25 Par Value Additional Paid-In Capital Retained Earnings S 2,465,000 1,900,000 3,200,000 2,100,000 4,380,000 $14,045,000 $1,145,000 1,300,000 1,000,000 190,000 1240,000 $4,875,000 Total Liabilities & Stockholders' Equity Case Inc. Frey Inc. Assets Cash Accounts & Other Receivables Inventories Land Depreciable Assets (net) Investment in Frey Inc Long-Term Investments & Other Assets S 825,000 2,140,000 2,310,000 650,000 4,575,000 2,680,000 865,000 $14,045,000 $ 330,000 835,000 1,045,000 300,000 1,980,000 2 385,000 $4,875,000 Total Assets Liabilities & Stockholders' Equity Accounts Payable & Other Current Liabilities Long-Term Debt Common Stock, $25 Par Value Additional Paid-In Capital Retained Earnings S 2,465,000 1,900,000 3,200,000 2,100,000 4,380,000 $14,045,000 $1,145,000 1,300,000 1,000,000 190,000 1240,000 $4,875,000 Total Liabilities & Stockholders' Equity