On January 1, 2024, Perry Company purchased 8,000 shares of Soho Company’s common stock for $120,000. Immediately after the stock acquisition, the statements of financial position of Perry and Soho appeared as follows:

Required: 
A. Calculate the percentage of Soho acquired by Perry Company. Prepare a schedule to com*-pute the difference between the book value of -equity and the value implied by the purchase  price. Any difference between the book value of equity and the value implied by the purchase price relates to subsidiary plant assets.
B. Prepare a consolidated balance sheet workpaper as of January 1, 2024.
C. Suppose instead that Perry acquired the 8,000 shares for $20 per share including a $5 per  share control premium. Prepare a computation and allocation of difference schedule.

Transcribed Image Text:

Assets Cash Accounts receivable Inventory Investment in Soho Company Plant assets Accumulated depreciation-plant assets Total Liabilities and Owners' Equity Current liabilities Mortgage notes payable Common stock, $10 par value Other contributed capital Retained earnings Total Perry $ 39,000 53,000 42,000 120,000 160,000 (52,000) $362,000 $ 18,500 40,000 120,000 135,000 48,500 $362,000 Soho $ 19,000 31,000 25,000 110,500 (19,500) $166,000 $ 26,000 100,000 16,500 23,500 $166,000