Pierre SA acquired 90 percent of Sousse SAs voting common stock for $585,000 on January 1, 2014.
Question:
Pierre SA acquired 90 percent of Sousse SA’s voting common stock for $585,000 on January 1, 2014. Sousse’s total stockholders’ equity in December 31, 2014, is as follows (in thousands):
$10 preferred stock, 1,000 share, cumulative, $100 nonparticipating, $100 par, $106 callable price
Common stock, $10 par 500 Other paid in capital 50 Retained earnings 150 Total stockholders’ equity $800
ADDITIONAL INFORMATION
Pierre purchased 60 percent of Sousse’s preferred stock for $55,000 in July 1, 2014.
Net income of Sousse during 2014 was $60,000 and no dividends were declared.
Assume net income and accrued dividend was proportionate throughout the year.
R E Q U I R E D : Prepare all necessary workpaper entries.
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker