Prince Corporation acquired 80 % interest in Summer Corporation on January 1, 2018, $1,200,000, when summer's...
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Prince Corporation acquired 80 % interest in Summer Corporation on January 1, 2018, $1,200,000, when summer's stockholders' equity was $900,000. On this date, the bo value of summer's assets and liabilities was equal to the fair value, except for inventor that were undervalued by $50,000 and sold in 2018, and plant assets that were undervalu by $100,000 and had a remaining useful life of 10 years from January 1, and Liabilit were overvalued by 50,000 which was retired in 2018. Summer's net income and dividen for 2018 were $250,000 and $50,000, respectively. Balance sheet information for Prince and Summer Corporations at December 31, 2018, a as follows (in thousands): Cash Receivable Inventory Plant, net Investment in Summer Total Liabilities Capital stock Retained Earnings Total Parent 250,000 150,000 550,000 2,250,000 1,272,000 4,472,000 1,350,000 1,000,000 2,122,000 4,472,000 Subsidiary 175,000 225,000 400,000 500,000 1,300,000 200,000 375,000 725,000 1,300,000 Required: 1. Prepare the journal entry on Prince Corporation's books to account for the investm in Summer Inc. (2 Ma 2. Prepare the required elimination entries. Show your computations for excess of fair over book value, goodwill, and amortization (25 M- 3. Prepare consolidated balance sheet Workpaper for Prince Corporation and its Subs at December 31, 2018. (13 M Required: 1. Prepare the journal entry on Prince Corporation's books to account for the investment in Summer Inc. (2 Marks) 2. Prepare the required elimination entries. Show your computations for excess of fair value over book value, goodwill, and amortization (25 Marks) 3. Prepare consolidated balance sheet Workpaper for Prince Corporation and its Subsidiary at December 31, 2018. (13 Marks) Prince Corporation acquired 80 % interest in Summer Corporation on January 1, 2018, $1,200,000, when summer's stockholders' equity was $900,000. On this date, the bo value of summer's assets and liabilities was equal to the fair value, except for inventor that were undervalued by $50,000 and sold in 2018, and plant assets that were undervalu by $100,000 and had a remaining useful life of 10 years from January 1, and Liabilit were overvalued by 50,000 which was retired in 2018. Summer's net income and dividen for 2018 were $250,000 and $50,000, respectively. Balance sheet information for Prince and Summer Corporations at December 31, 2018, a as follows (in thousands): Cash Receivable Inventory Plant, net Investment in Summer Total Liabilities Capital stock Retained Earnings Total Parent 250,000 150,000 550,000 2,250,000 1,272,000 4,472,000 1,350,000 1,000,000 2,122,000 4,472,000 Subsidiary 175,000 225,000 400,000 500,000 1,300,000 200,000 375,000 725,000 1,300,000 Required: 1. Prepare the journal entry on Prince Corporation's books to account for the investm in Summer Inc. (2 Ma 2. Prepare the required elimination entries. Show your computations for excess of fair over book value, goodwill, and amortization (25 M- 3. Prepare consolidated balance sheet Workpaper for Prince Corporation and its Subs at December 31, 2018. (13 M Required: 1. Prepare the journal entry on Prince Corporation's books to account for the investment in Summer Inc. (2 Marks) 2. Prepare the required elimination entries. Show your computations for excess of fair value over book value, goodwill, and amortization (25 Marks) 3. Prepare consolidated balance sheet Workpaper for Prince Corporation and its Subsidiary at December 31, 2018. (13 Marks)
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