Prince Corp. and Sprite Corp. reported the following balance sheets at January 1, 2017:

On January 2, 2017, Prince issued $36,000 of stock and used the proceeds to purchase 90% of Sprite's common stock. The excess of the purchase price over Sprite's book value of net assets was allocated 60% to inventory and 40% to goodwill.
Required:
Show the amounts that Prince will report on its January 2, 2017, consolidated balance sheet for the following items under (a) the acquisition method and (b) the purchase method.
1. Current assets.
2. Noncurrent assets.
3. Goodwill.
4. Current liabilities.
5. Noncurrent liabilities.
6. Stockholders' equity (controlling interest).
7. Stockholders' equity (non-controlling or minority interest).

Transcribed Image Text:

Sprite $15,000 25,000 $40,000 Prince Current assets Noncurrent assets $30,000 55,000 $85,000 Total assets Current liabilities Long-term debt Stockholders' equity $20,000 20,000 45,000 $85,000 $10,000 5,000 25,000 $40,000 Total liabilities and stockholders' equity