es Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At...

 

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es Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At the date of acquisition, the fair value of the noncontrolling interest was equal to 25 percent of Saul's book value. The balance sheets of the two companies for January 1, 20X1, are as follows: PENNY MANUFACTURING CORPORATION Balance Sheet Cash Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Investment in Saul Corporation Total Assets Cash Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Total Assets January 1, 20X1 $ 228,500 Accounts Payable $ 123,000 65,000 Bonds Payable 387,000 106,000 Common Stock 185,000 616,000 (140,000) Additional Paid-In Capital Retained Earnings 35,000 387,000 241,500 $1,117,000 Total Liabilities & Equities $1,117,000 SAUL CORPORATION Balance Sheet January 1, 20x1 $ 69,000 Accounts Payable $130,000 105,000 Bonds Payable 287,000 186,000 616,000 Common Stock ($10 par) 100,000 Additional Paid-In Capital 35,000 (237,000) Retained Earnings 187,000 $ 739,000 Total Liabilities & Equities $739,000 On January 2, 20X1, Penny purchased an additional 2,500 shares of common stock directly from Saul for $150,000. Required: a. Prepare the consolidation entry needed to complete a consolidated balance sheet worksheet immediately following the issuance of additional shares to Penny. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list Consolidation Worksheet Entries < A es Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At the date of acquisition, the fair value of the noncontrolling interest was equal to 25 percent of Saul's book value. The balance sheets of the two companies for January 1, 20X1, are as follows: PENNY MANUFACTURING CORPORATION Balance Sheet Cash Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Investment in Saul Corporation Total Assets Cash Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Total Assets January 1, 20X1 $ 228,500 Accounts Payable $ 123,000 65,000 Bonds Payable 387,000 106,000 Common Stock 185,000 616,000 (140,000) Additional Paid-In Capital Retained Earnings 35,000 387,000 241,500 $1,117,000 Total Liabilities & Equities $1,117,000 SAUL CORPORATION Balance Sheet January 1, 20x1 $ 69,000 Accounts Payable $130,000 105,000 Bonds Payable 287,000 186,000 616,000 Common Stock ($10 par) 100,000 Additional Paid-In Capital 35,000 (237,000) Retained Earnings 187,000 $ 739,000 Total Liabilities & Equities $739,000 On January 2, 20X1, Penny purchased an additional 2,500 shares of common stock directly from Saul for $150,000. Required: a. Prepare the consolidation entry needed to complete a consolidated balance sheet worksheet immediately following the issuance of additional shares to Penny. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list Consolidation Worksheet Entries < A

Answer rating: 100% (QA)

ANSWER To prepare the consolidation entry following the issuance of additional shares to Penny we n... View the full answer