Information on balance sheet book values and fair values just after Pileated Companys acquisition of all of
Question:
Information on balance sheet book values and fair values just after Pileated Company’s acquisition of all of Sparrow Corporation common stock for $250,000 cash is as follows:
Pileated Book Value Dr (Cr) | Sparrow Book Value Dr (Cr) | Sparrow Fair Value Dr (Cr) | |
Current assets | $ 30,000 | $ 4,000 | $ 3,000 |
Plant assets | 500,000 | 50,000 | 45,000 |
Identifiable intangible assets | 40,000 | 6,000 | 80,000 |
Investment in Sparrow | 250,000 | ||
Current liabilities | (100,000) | (3,000) | (3,000) |
Long-term liabilities | (370,000) | (50,000) | (50,000) |
Common stock | (2,000) | (400) | |
Additional paid-in capital | (260,000) | (13,000) | |
Retained earnings/deficit | (108,000) | 4,000 | |
Treasury stock | 8,000 | 400 | |
Accumulated other comprehensive loss | 12,000 | 2,000 | |
Total | $ 0 | $ 0 |
Prepare a consolidation work paper at the date of acquisition using the adjusting/elimination entries “E” and “R” as outlined in Advanced Accounting, by Susan S. Hamlen, 5th ed. © 2023.
Be sure to present a trial balance (debit and credit columns) for both the parent, subsidiary, adjustments/elimination entries, and consolidated data.
Advanced Accounting
ISBN: 978-0134472140
13th edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith