90.2K

Verified Solution

Link Copied!

On June 10, 20X8, Private Corporation acquired 70 percent of Secret Companys common stock. The fair value of the noncontrolling interest was $22,800 on that date. Summarized balance sheet data for the two companies immediately after the stock purchase are as follows:

	Private Corp.					Secret Company
Item	Book Value					Book Value				Fair Value
Cash		$	28,800				$	5,000			$	5,000
Accounts Receivable			45,000					10,000				10,000
Inventory			94,000					20,000				25,000
Buildings & Equipment (net)			139,000					70,000				90,000
Investment in Secret Company			53,200
Total		$	360,000				$	105,000			$	130,000
Accounts Payable		$	19,000				$	2,000				2,000
Bonds Payable			215,000					52,000				52,000
Common Stock			53,000					17,000
Retained Earnings			73,000					34,000
Total		$	360,000				$	105,000			$	54,000

Required: a. Record the consolidation entries required to prepare a consolidated balance sheet immediately after the purchase of Secret Company shares.

Answer & Explanation Solved by verified expert

See Answer