On 1/01/17 Piper company purchased 100% of the stock of Snake Corp. for $8,000,000. Snake...
60.1K
Verified Solution
Link Copied!
Question
Accounting
On 1/01/17 Piper company purchased 100% of the stock of Snake Corp. for $8,000,000. Snake continued to operate as a separate legal corporation after the acquisition. At the time of the acquisition Snake Corp had $4,800,000 of capital stock and $1,600,000 of retained earnings. All assets and liabilities of Snake had fair values equal to their book values at 1/1/17 except for plant assets that were undervalued by $400,000 (fair value $2,000,000 and its book value-$1,600,000) with a remaining life of 5 years. During 2017, Snake reported net income of $400,000 and declared dividends of $160,000 on 12/31/17. Balance eets for Piper and Snake at 12/31/17 (in 000's) are as follows Snake 400 2,020 60 Cash 1,000 Receivables Net 1,200 le Snake Dividends Receivable Inventor Land Equipment Net Investment in Snake Goodwill 160 7.400 4,800 14,400 8,160 800 3,200 1,600 Total Assets 37.120 9,220 60 640 24,000 3,200 37,120 1280 Accounts Payable Accts Payable Piper Dividends Payable Capital Stock Retained Earnings 160 4,800 1,840 Total L + Equi Prepare consolidated balance sheet workpapers for Piper and it's subsidiary at 12/31/17
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
