1. On January 1, 2016, Parent Company purchased 100% ofthe common stock of Subsidiary Company for $320,000. On this date,Subsidiary had total owners' equity of $240,000.
On January 1, 2016, the excess of cost over book value is dueto a $15,000 undervaluation of inventory, to a $5,000 overvaluationof Bonds Payable, and to an undervaluation of land, building andequipment. The fair value of land is $50,000. The fair value ofbuilding and equipment is $200,000. The book value of the land is$30,000. The book value of the building and equipment is$180,000.
Required:
a.
Using the information above and on the separate worksheet,complete a value analysis schedule
b.
Complete schedule for determination and distribution of theexcess of cost over book value.
Complete the worksheet for a consolidated balance sheet asof January 1, 2016.
Figure 2-5
Trial Balance
Trial Balance
Eliminations and
Parent
Sub.
Adjustments
Account Titles
Company
Company
Debit
Credit
Assets:
Inventory
50,000
30,000
Other Current Assets
199,000
165,000
Investment in Subsidiary
320,000
Land
120,000
30,000
Buildings
350,000
230,000
Accumulated Depreciation
(100,000)
(50,000)
Other Intangibles
40,000
Total
979,000
405,000
Liabilities and Equity:
Current Liabilities
191,000
65,000
Bonds Payable
100,000
Common Stock – P Co.
100,000
Paid-in Cap. in Exc. - P Co.
150,000
Retained Earnings – P Co.
538,000
Common Stock – S Co.
50,000
Paid-in Cap. in Exc. - S Co.
70,000
Retained Earnings – S Co.
120,000
NCI
Total
979,000
405,000
1. On January 1, 2016, Parent Company purchased 100% of the common stock of Subsidiary Company for $320,000. On this da
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answerhappygod
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