On January 2, 2019, Press Company purchased on the open market 90% of the outstanding common stock
Question:
On January 2, 2019, Press Company purchased on the open market 90% of the outstanding common stock of Sensor Company for $800,000 cash. Balance sheets for Press Company and Sensor Company on January 1, 2019, just before the stock acquisition by Press Company, were:
The full implied value of Sensor Company is to be ?pushed down? and recorded in Sensor Company?s books. The excess of the implied fair value over the book value of net assets acquired is allocated as follows: To equipment, 30%; to land, 20%; to patents, 50%.
Required:
A. Prepare the entry on Sensor Company?s books on January 2, 2019, to record the values implied by the 90% stock purchase by Press Company.
B. Prepare a consolidated balance sheet workpaper on January 1, 2019.
Balance Sheet Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Transcribed Image Text:
Sensor Company Press Company $ 38,000 Cash $1,065,000 76,000 Receivables 422,500 Inventory 216,500 124,000 Building (net) 465,000 322,000 185,000 Equipment (net) 229,000 Land 188,000 100,000 Patents 167,500 88,000 Total assets $2,753,500 $933,000 $ 667,00 $249,000 Liabilities Common stock 700,000 300,000 Other contributed capital 846,000 164,000 Retained earnings 540,500 220,000 Total equities $2,753,500 $933,000
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Part A Equipment 61467 Land 40978 Patents 102444 Revaluation Capital 204889 Implied fair value 80000009 888889 Book Value 300000164000220000 684000 Am...View the full answer
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This video is about ways to attempt consolidated balance sheet questions. since the unconsolidated financial statements of parent and subsidiary companies are prepared separately, consolidating the balance sheets of both companies is critical and sometimes becomes complex. the tutorial will guide students on to how questions on attempting questions on consolidated financial statements in an easier yet more effective way.