Pol Corporation purchased a 90 percent interest in San Corporation on December 31, 2010, for $2,700,000 cash,

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Pol Corporation purchased a 90 percent interest in San Corporation on December 31, 2010, for $2,700,000 cash, when San had capital stock of $2,000,000 and retained earnings of $500,000. All San's assets and liabilities were recorded at their fair values when Pol acquired its interest. The excess of fair value over book value is due to previously unrecorded patents and is being amortized over a 10-year period. The Pol???San affiliation is a vertically integrated merchandising operation, with San selling all of its output to Pol Corporation at 140 percent of its cost. Pol sells the merchandise acquired from San at 150 percent of its purchase price from San. All of Pol's December 31, 2011, and December 31, 2012, inventories of $280,000 and $420,000, respectively, were acquired from San. San's December 31, 2011, and December 31, 2012, inventories were $800,000 each. Pol's accounts payable at December 31, 2012, includes $100,000 owed to San from 2012 purchases. Comparative financial statements for Pol Corporation and San Corporation at and for the year ended December 31, 2012, are as follows (in thousands):

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REQUIRED: Prepare consolidation workpapers for Pol Corporation and Subsidiary for the year ended December 31,2012.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Advanced Accounting

ISBN: 9780132568968

11th Edition

Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith

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