Paper Corporation acquired 75 percent of Script Company's common stock on May 15, 20X3, at underlying...

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Paper Corporation acquired 75 percent of Script Company's common stock on May 15, 20X3, at underlying book value. Script's balance sheet on December 31, 20X6, contained these amounts Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Total Assets $ 75,000 50,000 Accounts Payable Bonds Payable. Additional Paid-In Capital Retained Earnings 125,000 700,000 Common Stock ($ 10 par) (220000) $730,000 Total Liabilities and Equities $ 30,000 200,000 100,000 80,000 320,000 $730,000 During 20X7, Paper earned operating income of $90,000, and Script reported net income of $45,000. Neither company declared any dividends during 20X7. Assume Paper Corporation has only no-par stock outstanding Script is considering repurchasing 1,000 of its outstanding shares as treasury stock for $68 each Requied: a. Assuming Script purchases the shares from Nonaffiliated Company on January 1, 20X7 (1) Compute the effect on the book value of the shares held by Paper (2) Prepare the entry on Paper's books to record the change in the book value of its investment in Script's shares (3) Present the worksheet consolidation entry needed on December 31, 20X7 to complete a worksheet. b. Assuming Script purchases the shares directly from Paper on January 1, 20X7 (1) Compute the effect on the book value of the shares held by Paper (2) Prepare the entry on Paper's books to record its sale of Script shares to Script (3) Present the worksheet consolidation entry needed on December 31, 20X7 to complete a worksheet Complete this question by entering your answers in the tabs below. Required 1A Required 18 Required 1C Required 2A Required 28 Required 2C Assuming Script purchases the shares from Nonaffiliated Company on January 1, 20X7: Paper Corporation acquired 75 percent of Script Company's common stock on May 15, 20X3, at underlying book value. Script's balance sheet on December 31, 20X6, contained these amounts Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Total Assets $ 75,000 50,000 Accounts Payable Bonds Payable. Additional Paid-In Capital Retained Earnings 125,000 700,000 Common Stock ($ 10 par) (220000) $730,000 Total Liabilities and Equities $ 30,000 200,000 100,000 80,000 320,000 $730,000 During 20X7, Paper earned operating income of $90,000, and Script reported net income of $45,000. Neither company declared any dividends during 20X7. Assume Paper Corporation has only no-par stock outstanding Script is considering repurchasing 1,000 of its outstanding shares as treasury stock for $68 each Requied: a. Assuming Script purchases the shares from Nonaffiliated Company on January 1, 20X7 (1) Compute the effect on the book value of the shares held by Paper (2) Prepare the entry on Paper's books to record the change in the book value of its investment in Script's shares (3) Present the worksheet consolidation entry needed on December 31, 20X7 to complete a worksheet. b. Assuming Script purchases the shares directly from Paper on January 1, 20X7 (1) Compute the effect on the book value of the shares held by Paper (2) Prepare the entry on Paper's books to record its sale of Script shares to Script (3) Present the worksheet consolidation entry needed on December 31, 20X7 to complete a worksheet Complete this question by entering your answers in the tabs below. Required 1A Required 18 Required 1C Required 2A Required 28 Required 2C Assuming Script purchases the shares from Nonaffiliated Company on January 1, 20X7:

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Paper Corporation Script Company Consolidation Script repurchases from Nonaffiliated Company Require... View the full answer