On October 7, 2008, X Corporation acquires 90% ofY Company's common stock in a purchase business...

 

Transcribed Image Text:

On October 7, 2008, X Corporation acquires 90% ofY Company's common stock in a purchase business combination with $ 234,000 cash. The item of land in Y's balance sheet appears $ 50,000, while its market value at acquisition date amounted S 10,000. balance sheets of the two companies just prior to the acquisition: Item Company X Company Y Assets Current assets (cash, A/R, inventory) Net fixed assets (equipment, building less deprecation) Land 400,000 400,000 110,000 200,000 50,000 360,000 Total Assets S00,000 Liabilities & Owner's Equity Liabilities (A/P, notes payable, bonds payable) Common stock Retained earnings 280,000 400,000 120,000 800,000 60,000 200,000 100,000 360,000 Total Liabilities & Owner's Equity Required 1. Journal entry to record acquisition of the net assets of Company Y by Company X. 2. Balance sheet of Company X subsequent to asset acquisition. 3. Consolidated working sheet and Consolidated Balance Sheet. On October 7, 2008, X Corporation acquires 90% ofY Company's common stock in a purchase business combination with $ 234,000 cash. The item of land in Y's balance sheet appears $ 50,000, while its market value at acquisition date amounted S 10,000. balance sheets of the two companies just prior to the acquisition: Item Company X Company Y Assets Current assets (cash, A/R, inventory) Net fixed assets (equipment, building less deprecation) Land 400,000 400,000 110,000 200,000 50,000 360,000 Total Assets S00,000 Liabilities & Owner's Equity Liabilities (A/P, notes payable, bonds payable) Common stock Retained earnings 280,000 400,000 120,000 800,000 60,000 200,000 100,000 360,000 Total Liabilities & Owner's Equity Required 1. Journal entry to record acquisition of the net assets of Company Y by Company X. 2. Balance sheet of Company X subsequent to asset acquisition. 3. Consolidated working sheet and Consolidated Balance Sheet.

Answer rating: 100% (QA)

1 Market value of assets of company Y 11000020000010000 320000 The market value ... View the full answer