Question 2 On January 1, 2020, Party Corporation acquired 70 percent of Selfie Company's common stock for $84,000 cash. The fair value of the noncontrolling interest at that date was determined to be $36,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Party Co. $26,000 30,000 32,000 63,000 175,000 40,000 84,000 $450,000 Selfie Co. Cash $15,000 22,500 18,000 Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in Selfie Corp. Total Assets 44,500 85,000 -30,000 $155,000 Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities and Equity $35,000 25,000 $90,000 120,000 150,000 90,000 $450,000 40,000 55,000 $155,000 At the date of the business combination, the book values of Selfie's net assets and liabilities approximated fair value except for inventory, which had a fair value of $21,500, and building and equipment, which had a fair value of $55,000. Required: A) Prepare the equity method entries on Party's books for the acquisition of Seifie on January 1, 2020. B) Give the basic consolidation entry. ) Give excess value (differential) reclassification entries at the date of acquisition. D) Give accumulated depreciation consolidation entry. E) What is the balance of Inventory in the consolidated balance sheet as of January 1, 2020. e) S50,000 a) 518,000 b) $21,500 d) $53,500 e) None F) What is the balance of Common stock in the consolidated balance sheet as of anuary 1 2020. b) $40,000 b) 590,000 S150,000 d) S190,000 e) None G) What is the amount of total assets in the consolidated balonce sheet as of anuary 1 202o. S510,000 d) 560s.000 e None c) $594,000 b) 5546,000
Question 2 On January 1, 2020, Party Corporation acquired 70 percent of Selfie Company's common stock for $84,000 cash. The fair value of the noncontrolling interest at that date was determined to be $36,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Party Co. $26,000 30,000 32,000 63,000 175,000 40,000 84,000 $450,000 Selfie Co. Cash $15,000 22,500 18,000 Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in Selfie Corp. Total Assets 44,500 85,000 -30,000 $155,000 Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities and Equity $35,000 25,000 $90,000 120,000 150,000 90,000 $450,000 40,000 55,000 $155,000 At the date of the business combination, the book values of Selfie's net assets and liabilities approximated fair value except for inventory, which had a fair value of $21,500, and building and equipment, which had a fair value of $55,000. Required: A) Prepare the equity method entries on Party's books for the acquisition of Seifie on January 1, 2020. B) Give the basic consolidation entry. ) Give excess value (differential) reclassification entries at the date of acquisition. D) Give accumulated depreciation consolidation entry. E) What is the balance of Inventory in the consolidated balance sheet as of January 1, 2020. e) S50,000 a) 518,000 b) $21,500 d) $53,500 e) None F) What is the balance of Common stock in the consolidated balance sheet as of anuary 1 2020. b) $40,000 b) 590,000 S150,000 d) S190,000 e) None G) What is the amount of total assets in the consolidated balonce sheet as of anuary 1 202o. S510,000 d) 560s.000 e None c) $594,000 b) 5546,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question 2
On January 1, 2020, Party Corporation acquired 70 percent of Selfie Company's common stock
for $84,000 cash. The fair value of the noncontrolling interest at that date was determined to be
$36,000. Data from the balance sheets of the two companies included the following amounts as
of the date of acquisition:
Party Co.
$26,000
30,000
32,000
63,000
175,000
40,000
84,000
$450,000
Selfie Co.
$15,000
22,500
Cash
Accounts Receivable
Inventory
18,000
44,500
Land
Buildings and Equipment
Less: Accumulated Depreciation
Investment in Selfie Corp.
85,000
-30,000
Total Assets
$155,000
Accounts Payable
$90,000
120,000
150,000
$35,000
25,000
40,000
55,000
$155,000
Bonds Payable
Common Stock
Retained Earnings
Total Liabilities and Equity
90,000
$450,000
At the date of the business combination, the book values of Selfie's net assets and liabilities
approximated fair value except for inventory, which had a fair value of $21,500, and building and
equipment, which had a fair value of $55,000.
Required:
A) Prepare the equlty method entries on Party's books for the acquisition of Selfie on January 1,
2020.
B) Give the basic consolidation entry.
C) Give excess value (differential) reclassification entries at the date of acquisition.
D) Give accumulated depreciation consolidation entry.
E) What is the balance of Inventory in the consolidated balance sheet as of January 1, 2020.,
c) $50,000
a) $18,000
b) $21,500
d) $53,500
e) None
F) What is the balance of Common stock in the consolidated balance sheet as of January 1, 2020.
d) S190,000
e) None
b) $40,000
b) s90,000
$150,000
G) What is the amount of total assets in the consolidated balonce sheet os of Jonuary L 2020.
) 5510,000
d) 5605,000
e) None
c) $594,000
b) $546,000
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