Powder Company spent $240,000 to acquire all of Sawmill Corporation's stock on January 1, 20X2. The balance sheets of the twocompanies on December 31, 20X3, showed the following amounts:CashAccounts ReceivableLandBuildings and EquipmentLess: Accumulated DepreciationInvestment in Sawmill CorporationAccounts PayableTaxes PayableNotes PayableCommon StockRetained EarningsPowderCompany$ 30,000100,00060,000500,000(230,000)252,000$ 712,000$ 80,00040,000100,000200,000292,000$ 712,000SawmillCorporation$ 20,00040,00050,000350,000(75,000)$385,000$ 10,00070,00085,000100,000120,000$385,000Sawmill reported retained earnings of $100,000 at the date of acquisition. The difference between the acquisition price and underlyingbook value is assigned to buildings and equipment with a remaining economic life of 10 years from the date of acquisition. AssumeSawmill's accumulated depreciation on the acquisition date was $25,000.Required:Prepare a consolidated balance sheet worksheet as of December 31, 20X3.

Consolidation is a financial process wherein the financial statements of a parent company and its…

Cash Accounts Receivable Land Buildings and Equipment Less: Accumulated Depreciation Investment in Sawmill Corporation Accounts Payable Taxes Payable Notes Payable Common Stock Retained Earnings Company $ 30,000 100,000 60,000 500,000 (230,000) 252,000 $ 712,000 $80,000 40,000 100,000 200,000 292,000 $ 712,000 Corporation $ 20,000 40,000 50,000 350,000 (75,000) $385,000 $10,000 70,000 85,000 100,000 120,000 $385,000 Sawmill reported retained earnings of $100,000 at the date of acquisition. The difference between the acquisition price and underlying book value is assigned to buildings and equipment with a remaining economic life of 10 years from the date of acquisition. Assume Sawmill's accumulated depreciation on the acquisition date was $25,000. Required: Prepare a consolidated balance sheet worksheet as of December 31, 20X3.

Cash Accounts Receivable Land Buildings and Equipment Less: Accumulated Depreciation Investment in Sawmill Corporation Accounts Payable Taxes Payable Notes Payable Common Stock Retained Earnings Company $ 30,000 100,000 60,000 500,000 (230,000) 252,000 $ 712,000 $80,000 40,000 100,000 200,000 292,000 $ 712,000 Corporation $ 20,000 40,000 50,000 350,000 (75,000) $385,000 $10,000 70,000 85,000 100,000 120,000 $385,000 Sawmill reported retained earnings of $100,000 at the date of acquisition. The difference between the acquisition price and underlying book value is assigned to buildings and equipment with a remaining economic life of 10 years from the date of acquisition. Assume Sawmill's accumulated depreciation on the acquisition date was $25,000. Required: Prepare a consolidated balance sheet worksheet as of December 31, 20X3.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Powder Company spent $240,000 to acquire all of Sawmill Corporation's stock on January 1, 20X2. The balance sheets of the two companies on December 31, 20X3, showed the following amounts: Cash Accounts Receivable Land Buildings and Equipment Less: Accumulated Depreciation Investment in Sawmill Corporation Accounts Payable Taxes Payable Notes Payable Common Stock Retained Earnings Powder Company $ 30,000 100,000 60,000 500,000 (230,000) 252,000 $ 712,000 $ 80,000 40,000 100,000 200,000 292,000 $ 712,000 Sawmill Corporation $ 20,000 40,000 50,000 350,000 (75,000) $ 385,000 $ 10,000 70,000 85,000 100,000 120,000 $ 385,000 Sawmill reported retained earnings of $100,000 at the date of acquisition. The difference between the acquisition price and underlying book value is assigned to buildings and equipment with a remaining economic life of 10 years from the date of acquisition. Assume Sawmill's accumulated depreciation on the acquisition date was $25,000. Required: a. Prepare the appropriate…
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