P Corporation paid $420,000 for 70% of S Corporation’s $10 par common stock on December 31, 2013, when S Corporation’s stockholders’ equity was made up of $300,000 of Common Stock, $90,000 of Other Contributed Capital and $60,000 of Retained Earnings. S’s identifiable assets and liabilities reflected their fair values on December 31, 2013, except for S’s inventory which was undervalued by $60,000 and their land which was undervalued by $25,000. Balance sheets for P and S immediately after the business combination are presented in the partially completed work-paper below.
Eliminations
P
S
Debit
Credit
Noncontrolling Interest
Consolidated Balances
ASSETS
Cash
$40,000
$30,000
Accounts
receivable-net
30,000
45,000
Inventories
185,000
165,000
Land
45,000
120,000
Plant assets-
net
480,000
240,000
Investment in
S Corp.
420,000
Difference between implied and book value
Goodwill
Total Assets
$1,200,000
$600,000
EQUITIES
Current
liabilities
$170,000
$150,000
Capital stock
600,000
300,000
Additional paid-in capital
150,000
90,000
Retained earnings
280,000
60,000
Noncontrolling interest
Total Equities
$1,200,000
$600,000
Answers: 2
Another question on Business
Business, 22.06.2019 01:00
Cooper, cpa, is auditing the financial statements of a small rural municipality. the receivable balances represent residents’ delinquent real estate taxes. internal control at the municipality is weak. to determine the existence of the accounts receivable balances at the balance sheet date, cooper would most likely: cooper, cpa, is auditing the financial statements of a small rural municipality. the receivable balances represent residents’ delinquent real estate taxes. internal control at the municipality is weak. to determine the existence of the accounts receivable balances at the balance sheet date, cooper would most likely:
Answers: 3
Business, 22.06.2019 07:00
Imagine you own an established startup with growing profits. you are looking for funding to greatly expand company operations. what method of financing would be best for you?
Answers: 2
Business, 22.06.2019 08:30
Match the given situations to the type of risks that a business may face while taking credit. 1. beta ltd. had taken a loan from a bank for a period of 15 years, but its sales are gradually showing a decline. 2. alpha ltd. has taken a loan for increasing its production and sales, but it has not conducted any research before making this decision. 3. delphi ltd. has an overseas client. the economy of the client’s country is going through severe recession. 4. delphi ltd. has taken a short-term loan from the bank, but its supply chain logistics are not in place. a. foreign exchange risk b. operational risk c. term of loan risk d. revenue projections risk
Answers: 3
Business, 22.06.2019 09:40
Henry crouch's law office has traditionally ordered ink refills 55 units at a time. the firm estimates that carrying cost is 35% of the $11 unit cost and that annual demand is about 240 units per year. the assumptions of the basic eoq model are thought to apply. for what value of ordering cost would its action be optimal? a) for what value of ordering cost would its action be optimal?
Answers: 2
You know the right answer?
P Corporation paid $420,000 for 70% of S Corporation’s $10 par common stock on December 31, 2013, wh...
Questions
Mathematics, 20.05.2021 01:00
Computers and Technology, 20.05.2021 01:00
English, 20.05.2021 01:00
Mathematics, 20.05.2021 01:00
Mathematics, 20.05.2021 01:00
English, 20.05.2021 01:00
History, 20.05.2021 01:00
