Plaza, Inc., acquires percent of the outstanding common stock of Stanford Corporation on January in exchange for $ cash. At the acquisition date, Stanfords total fair value, including the noncontrolling interest, was assessed at $ Also at the acquisition date, Stanford's book value was $
Several individual items on Stanfords financial records had fair values that differed from their book values as follows:
Book ValueFair ValueTrade names indefinite life$$Property and equipment netyear remaining lifePatent year remaining life
For internal reporting purposes, Plaza, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December for both companies.
PlazaStanfordRevenues$$Cost of goods soldDepreciation expenseAmortization expenseEquity in income of StanfordNet income$$Retained earnings, $$Net incomeDividends declaredRetained earnings, $$Current assets$$Investment in StanfordTrade namesProperty and equipment netPatentsTotal assets$$Accounts payable$$Common stockAdditional paidin capitalRetained earnings aboveTotal liabilities and equities$$
At yearend, there were no intraentity receivables or payables.
Prepare a worksheet to consolidate the financial statements of Plaza, Inc., and its subsidiary Stanford. For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.
