2. On 12/31, Choco acquired Cake by issuing 40,000 shares of its common stock when the market value (=fair value) is $32/share. Cake will remain incorporated. Choco has common stock with $15 par, 50,000 shares outstanding and Cake has $5 par, 60,000 shares outstanding Choco Book ValuesCake Book ValuesCake Fair Values Cash and Receivable350,000180,000170,000 Inventories250,000100,000150,000 Land700,000120,000240,000 Building and equipment600,000600,000900,000 Patented technology100,000060,000 Accounts payable300,000120,000150,000 Long-term debt0400,000350,000 Common stock750,000300,000 Additional paid in capital500,00060,000 Retained earnings 12/31450,000120,000 Revenues350,000160,000 Expenses310,000130,000 Q7. Prepare a worksheet to consolidate Choco’s and Cake’s balance sheet.Balance SheetChocoCakeConsolidated Entries Consolidated Totals DebitCredit Cash and receivable$324,000$180,000 Inventory250,000100,000 Investment in Cake.1,280,0000 Land700,000120,000 Building and Equipment600,000600,000 Patented technology100,0000 Goodwill00 Total assets$3,254,000$1,000,000 Accounts payable(300,000)(120,000) Long-term debt0(400,000) Common stock(1,350,000)(300,000) Additional paid-in capital(1,168,000)(60,000) Retained earnings,12/31(436,000)(120,000) Total liabilities and equity$(3,254,000)$(1,000,000)

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Answered: Prepare a worksheet to consolidate…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 1MC

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2. On 12/31, Choco acquired Cake by issuing 40,000 shares of its common stock when the market value (=fair value) is $32/share. Cake will remain incorporated. Choco has common stock with $15 par, 50,000 shares outstanding and Cake has $5 par, 60,000 shares outstanding

	Choco Book Values	Cake Book Values	Cake Fair Values
Cash and Receivable	350,000	180,000	170,000
Inventories	250,000	100,000	150,000
Land	700,000	120,000	240,000
Building and equipment	600,000	600,000	900,000
Patented technology	100,000	0	60,000
Accounts payable	300,000	120,000	150,000
Long-term debt	0	400,000	350,000
Common stock	750,000	300,000
Additional paid in capital	500,000	60,000
Retained earnings 12/31	450,000	120,000
Revenues	350,000	160,000
Expenses	310,000	130,000

Q7. Prepare a worksheet to consolidate Choco’s and Cake’s balance sheet.

Balance Sheet	Choco	Cake	Consolidated Entries		Consolidated Totals
			Debit	Credit
Cash and receivable	$324,000	$180,000
Inventory	250,000	100,000
Investment in Cake.	1,280,000	0
Land	700,000	120,000
Building and Equipment	600,000	600,000
Patented technology	100,000	0
Goodwill	0	0
Total assets	$3,254,000	$1,000,000
Accounts payable	(300,000)	(120,000)
Long-term debt	0	(400,000)
Common stock	(1,350,000)	(300,000)
Additional paid-in capital	(1,168,000)	(60,000)
Retained earnings,12/31	(436,000)	(120,000)
Total liabilities and equity	$(3,254,000)	$(1,000,000)

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