FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Pencil Company acquired 70 percent of Stylus Corporation’s stock on January 2, 20X3, for $85,400 cash. Summarized balance sheet data for the companies on December 31, 20X2, follow:

  Pencil Company Stylus Corporation
Book Value Fair Value Book Value Fair Value
Cash $ 202,000 $ 202,000 $ 65,000 $ 65,000
Other Assets 401,000 401,000 124,000 124,000
Total Debits $ 603,000   $ 189,000  
Current Liabilities $ 87,000 87,000 $ 67,000 67,000
Common Stock 287,000   65,000  
Retained Earnings 229,000   57,000  
Total Credits $ 603,000   $ 189,000  

Required:

Prepare a consolidated balance sheet immediately following the acquisition.

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