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

 

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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: 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 PENNY MANUFACTURING CORPORATION Balance Sheet $ January 1, 20x1 229,500 68,000 117,000 611,000 Accounts Payable. Bonds Payable Common Stock $ 761,000 Additional Paid-In Capital Retained Earnings (142,000) 240,000 $1,123,500 Total Liabilities & Equities SAUL CORPORATION Balance Sheet January 1, 20x1 $ 67,000 Accounts Payable. 108,000 197,000 611,000 (222,000) Bonds Payable Common Stock ($10 par) Additional Paid-In Capital Retained Earnings Total Liabilities & Equities $ 133,500 390,000 180,000 30,000 390,000 $1,123,500 $151,000 290,000 100,000 30,000 190,000 $761,000 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.) No A Event 1 Answer is complete but not entirely correct. Accounts Common stock Additional paid-in capital Retained earnings Investment in Saul Corporation NCI in NA of Saul Corporation Debit Credit 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: 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 PENNY MANUFACTURING CORPORATION Balance Sheet $ January 1, 20x1 229,500 68,000 117,000 611,000 Accounts Payable. Bonds Payable Common Stock $ 761,000 Additional Paid-In Capital Retained Earnings (142,000) 240,000 $1,123,500 Total Liabilities & Equities SAUL CORPORATION Balance Sheet January 1, 20x1 $ 67,000 Accounts Payable. 108,000 197,000 611,000 (222,000) Bonds Payable Common Stock ($10 par) Additional Paid-In Capital Retained Earnings Total Liabilities & Equities $ 133,500 390,000 180,000 30,000 390,000 $1,123,500 $151,000 290,000 100,000 30,000 190,000 $761,000 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.) No A Event 1 Answer is complete but not entirely correct. Accounts Common stock Additional paid-in capital Retained earnings Investment in Saul Corporation NCI in NA of Saul Corporation Debit Credit

Answer rating: 100% (QA)

I see that you are required to prepare a consolidation entry after Penny Manufacturing Corporation purchased additional shares of Saul Corporation To provide you with a solution I need to calculate th... View the full answer