Name: Score: P Corp. acquired 80 percent of S Corp's common shares on January 1, 2020...

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Name: Score: P Corp. acquired 80 percent of S Corp's common shares on January 1, 2020 for $620,000 cash S Corp, will continue as a separate legal entity. Further examination of S Corp's balance sheet below provides book and fair values: S Corporation's Balance Sheet (January 1, 2020) Cash and Receivables Inventories Land Buildings and Equipment (net) (net) Intangibles Totals Current Liabilities Bonds Payable (net of discount) Totals Common Stock-S Contributed Capital-S Retained Earnings-S Totals Book Value Fair Value $120,000 $ 120,000 $ 470,000 470,000 $ 100,000 125,000 $ 200,000 200,000 $ 250,000 450,000 $200,000 $ 1,140,000 $1,365,000 $ 225,000 S $ 90,000 500,000 590,000 $ Difference 300,000 240,000 10,000 550,000 90,000 500,000 590,000 25,000 Instructions: On the paper provided, using the above data: 1. Calculate the implied value of S Corp. 2. Calculate the allocation of difference between implied and book value schedule. See p. 95 of text. Show if any goodwill resulted. 3. Record the journal entry to record P's acquisition of S Corp on January 1. 4. Prepare worksheet entries 1 and 2 (see p. 96 of text). Name: Score: P Corp. acquired 80 percent of S Corp's common shares on January 1, 2020 for $620,000 cash S Corp, will continue as a separate legal entity. Further examination of S Corp's balance sheet below provides book and fair values: S Corporation's Balance Sheet (January 1, 2020) Cash and Receivables Inventories Land Buildings and Equipment (net) (net) Intangibles Totals Current Liabilities Bonds Payable (net of discount) Totals Common Stock-S Contributed Capital-S Retained Earnings-S Totals Book Value Fair Value $120,000 $ 120,000 $ 470,000 470,000 $ 100,000 125,000 $ 200,000 200,000 $ 250,000 450,000 $200,000 $ 1,140,000 $1,365,000 $ 225,000 S $ 90,000 500,000 590,000 $ Difference 300,000 240,000 10,000 550,000 90,000 500,000 590,000 25,000 Instructions: On the paper provided, using the above data: 1. Calculate the implied value of S Corp. 2. Calculate the allocation of difference between implied and book value schedule. See p. 95 of text. Show if any goodwill resulted. 3. Record the journal entry to record P's acquisition of S Corp on January 1. 4. Prepare worksheet entries 1 and 2 (see p. 96 of text).

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1 Calculation of implied value of S Corp Implied Value Purchase Pricepercentage of holding Purchase ... View the full answer