Assets Liabilities and Equity $100,000 200,000 Current liabilities ... Common stock ($10 par)... Retained earnings .... $ 50,000 100,000 150,000 Current assets Depreciable fixed assets (net) .. Total as sets.. $300,000 Total liabilities and equity $300,000
Parker Company acquires an 80% interest in Sargent Company for $300,000 in cash on January 1, 2015, when Sargent Company has the following balance sheet: (attached)
The excess of the price paid over book value is attributable to the fixed assets, which have a fair value of $250,000, and to
The following
Parker Sargent
Current Assets . . . . . . . . . . . . . . . . . . . . . . . . 10,000 130,000
Depreciable Fixed A . . . . . . . . . . . . . . . . . . 400,000 200,000
Investment in Sargent . .. .. . . . . . . . . . . . . 316,000
Current Liabilities. . . . . . . . . . . . . . . . . . . . . (60,000) (40,000)
Common Stock ($10 par) . . . . . . . . . . . . (300,000) (100,000)
Retained Earnings, January 1, 2015. . . . .200,000) (150,000)
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . (150,000) (100,000)
Expenses . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 110,000 75,000
Subsidiary Income. . . . . . . . .. . . . . . . . . . . . (20,000)
Dividends Declared . . . . . . . . . . . . . . . . . . 5,000
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0
1. Prepare a determination and distribution of excess schedule (a value analysis is not needed) for the investment.
2. Prepare all the eliminations and adjustments that would be made on the 2015 consolidated worksheet.
3. Prepare the 2015 consolidated income statement and its related income distribution schedules.
4. Prepare the 2015 statement of retained earnings.
5. Prepare the 2015 consolidated balance sheet.
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