Subsidiary Acquired for Cash Fineline Pencil Company acquired 80 percent of Smudge Eraser Corporation's stock on January 2, 20X3, for $72,000 cash. Summarized balance sheet data for the companies on December 31, 20X2, are as follows: Fineline Pencil Company Smudge Eraser Corporation Book Value Cash Other Assets Total Debits $200,000 400,000 $600,000 Fair Value $200,000 400,000 Book Value $50,000 120,000 $170,000 Fair Value $50,000 120,000 Current Liabilities Common Stock Retained Earnings Total Credits $100,000 300,000 200,000 $600,000 100,000 $80,000 50,000 40,000 $170,000 80,000 Required Prepare a consolidated balance sheet immediately following the acquisition.
Subsidiary Acquired for Cash Fineline Pencil Company acquired 80 percent of Smudge Eraser Corporation's stock on January 2, 20X3, for $72,000 cash. Summarized balance sheet data for the companies on December 31, 20X2, are as follows: Fineline Pencil Company Smudge Eraser Corporation Book Value Cash Other Assets Total Debits $200,000 400,000 $600,000 Fair Value $200,000 400,000 Book Value $50,000 120,000 $170,000 Fair Value $50,000 120,000 Current Liabilities Common Stock Retained Earnings Total Credits $100,000 300,000 200,000 $600,000 100,000 $80,000 50,000 40,000 $170,000 80,000 Required Prepare a consolidated balance sheet immediately following the acquisition.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Subsidiary Acquired for Cash
Fineline Pencil Company acquired 80 percent of Smudge Eraser Corporation's stock on January 2,
20X3, for $72,000 cash. Summarized balance sheet data for the companies on December 31,
20X2, are as follows:
Fineline Pencil
Company
Smudge Eraser
Corporation
Book Value
Cash
Other Assets
Total Debits
$200,000
400,000
$600,000
Fair Value
$200,000
400,000
Book Value
$50,000
120,000
$170,000
Fair Value
$50,000
120,000
Current Liabilities
Common Stock
Retained Earnings
Total Credits
$100,000
300,000
200,000
$600,000
100,000
$80,000
50,000
40,000
$170,000
80,000
Required
Prepare a consolidated balance sheet immediately following the acquisition.
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