Prophet Corporation acquired 75 percent of Seer Corporations voting common stock on December 31, 20X4,...
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Accounting
Prophet Corporation acquired 75 percent of Seer Corporations voting common stock on December 31, 20X4, for $390,000. At the date of combination, Seer reported the following:
Assets
Liabilities
Current Assets
$
220,000
Current Liabilities
$
80,000
Long-Term Assets (net)
420,000
Long-Term Liabilities
200,000
Common Stock
120,000
Retained Earnings
240,000
Total
$
640,000
Total
$
640,000
At December 31, 20X4, the book values of Seer's net assets and liabilities approximated their fair values, except for buildings, which had a fair value of $80,000 more than book value, and inventories, which had a fair value of $36,000 more than book value. The fair value of the noncontrolling interest was determined to be $130,000 at that date. Required: Prophet Corporation wishes to prepare a consolidated balance sheet immediately following the business combination. Prepare the consolidation entry or entries needed to prepare a consolidated balance sheet at December 31, 20X4. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Part B. Record the excess value (differential) reclassification entry.
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