Calculate percentage of soho acquired by perry company

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Reference no: EM13548942

Consolidated Balance Sheet Workpaper

On January 1, 2011, Perry Company purchased 8,000 shares of Soho Company"s common stock for $120,000. Immediately after the stock acquisition, the statements of financial position of Perry and Soho appeared as follows:

Assets

Perry

Soho

Cash

$ 39,000

$ 19,000

Accounts receivable

53,000

31,000

Inventory

42,000

25,000

Investment in Soho Company

120,000


Plant assets

160,000

110,500

Accumulated depreciation-plant assets

(52,000)

(19,500)

Total

$362,000

$166,000

Liabilities and Owners" Equity



Current liabilities

$ 18,500

$ 26,000

Mortgage notes payable

40,000


Common stock, $10 par value

120,000

100,000

Other contributed capital

135,000

16,500

Retained earnings

48,500

23,500

Total

$362,000

$166,000

Required:

  1. Calculate the percentage of Soho acquired by Perry Company. Prepare a schedule to compute the difference between book value of equity and the value implied by the purchase price. Any difference between the book value of equity and the value implied by the purchase price relates to subsidiary plant assets.
  2. Prepare a consolidated balance sheet workpaper as of January 1, 2011.
  3. Suppose instead that Perry acquired the 8,000 shares for $20 per share including a $5 per share control premium. Prepare a computation and allocation of difference schedule.

Reference no: EM13548942

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