Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the date of
Question:
Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the date of acquisition, Scrub Company reported assets and liabilities with book values of $420,000 and $165,000, respectively, common stock outstanding of $80,000, and retained earnings of $175,000. The book values and fair values of Scrub’s assets and liabilities were identical except for land, which had increased in value by $20,000, and inventories, which had decreased by $7,000.
Required
Give the consolidation entries required to prepare a consolidated balance sheet immediately after the business combination assuming Power acquired its ownership of Scrub for
a. $280,000.
b. $251,000.
Step by Step Answer:
Advanced Financial Accounting
ISBN: 9781260772135
13th Edition
Authors: Theodore Christensen, David Cottrell, Cassy Budd