Discuss and assign values to hopkins post-acquisition assets

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Reference no: EM131761315

Easton Corporation purchased 100% of the common stock of Hopkins Inc. on January 2, 2017. Hopkins' balance sheet on January 2, 2017 was as follows:

Accounts receivable-net

$ 250,000

Current liabilities

$ 80,000

Inventory

340,000

Long term debt

170,000

Land

140,000

Common stock ($1 par)

50,000

Building-net

120,000

Paid-in capital

450,000

Equipment-net

90,000

Retained earnings

190,000

Total Assets

$940,000

Total Liabilities & Equity

$940,000

Fair values agree with book values except for inventory, land, and equipment that have fair values of $390,000, $150,000 and $75,000, respectively. Hopkins has unrecorded patent rights valued at $30,000.

Required:

a. Prepare a schedule to assign values to Hopkins' post-acquisition assets and liabilities assuming Easton paid $780,000 cash for the acquisition.

b. Prepare the consolidation entries for a January 2, 2017 consolidated balance sheet.

Reference no: EM131761315

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