Land is undervalued 20000 buildings and equipment have a

Reference no: EM13566816

December 31, 20X1, Parent Company purchased 80% of the common stock of Subsidiary Company for $280,000. On this date, Subsidiary had total owners' equity of $250,000 (common stock $20,000; other paid-in capital, $80,000; and retained earnings, $150,000). Any excess of cost over book value is due to the under or overvaluation of certain assets and liabilities. Inventory is undervalued $5,000. Land is undervalued $20,000. Buildings and equipment have a fair value which exceeds book value by $30,000. Bonds payable are overvalued $5,000. The remaining excess, if any, is due to goodwill.

Required:

a.	Prepare a value analysis schedule for this business combination.

b.	Prepare the determination and distribution schedule for this business combination

c.	Prepare the necessary elimination entries in general journal form.

a) Value analysis schedule

	Company Implied Fair Value	Parent Price	NCI Value
Company fair value
Fair value identifiable net assets
Goodwill

b) Determination and distribution schedule:

	Company Implied Fair Value	Parent Price	NCI Value
Fair value of subsidiary
Less book value:
C Stk
APIC
R/E
Total S/E
Interest Acquired
Book value
Excess of fair over book

Adjust identifiable accounts:
Inventory
Land
Bldgs & Equip
Bond Pay Discount
Goodwill
Total

c) Elimination entries:

ELIMINATION ENTRY 'EL'
C Stk-Sub
APIC-Sub
R/E-Sub
Investment in Sub
	200,000	200,000
ELIMINATION ENTRY 'D'
Inventory
Land
Bldgs & Equip
Bond Pay Discount
Goodwill
Investment in Sub
R/E-Sub (NCI)
	100,000	100,000

Reference no: EM13566816

Questions Cloud

Lidell awards co budgeted production of 66000 brass plaques : 1. curley awards co. projected sales of 64000 brass plaques for 2010. the estimated january 1 2010 inventory is 4500

Write about assessing conflict and how it relates to your : write about assessing conflict and how it relates to your life.papers should be 1-2 pages not including cover page and

X2 issued callable bonds on january 1 2012 the bonds pay : x2 issued callable bonds on january 1 2012. the bonds pay interest annually on december 31 each year. x2s accountant

Boehm incorporated is expected to pay a 150 per share : boehm incorporated is expected to pay a 1.50 per share dividend at the end of this year i.e. d1 1.50. the dividend is

Land is undervalued 20000 buildings and equipment have a : december 31 20x1 parent company purchased 80 of the common stock of subsidiary company for 280000. on this date

Esteban appleby certified public accountant cpa is an : esteban appleby certified public accountant is an assistant to the controller of summerfield consulting co. in his

Explain the hardball techniques discussed in this portion : american government the nation hardball by chris matthewsassignment book notes on part iv of the book hardball by chris

Lissa cos stock price is currently 2675 the risk-free rate : lissa co.s stock price is currently 26.75. a 6-month call option on lissas stock has a strike price of 25 and has an

A bond that pays interest forever and has no maturity date : a bond that pays interest forever and has no maturity date is a perpetual bond also called a perpetuity or a consol. in

User Account

All Pages