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    Firda Arfianti - LC53 - CONSOLIDATION BALANCE SHEET Exercise 3-3

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    Prunce Company acquired 90% of Sun Company for $192,000 cash. [1] A journal entry was made to record the purchase. [2] A consolidated balance sheet was prepared that combined the assets and liabilities of both companies, and calculated the noncontrolling interest based on the 10% ownership not acquired. [3]

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    Firda Arfianti - LC53 - CONSOLIDATION BALANCE SHEET Exercise 3-3

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    Firda
    318 views2 pages
    Prunce Company acquired 90% of Sun Company for $192,000 cash. [1] A journal entry was made to record the purchase. [2] A consolidated balance sheet was prepared that combined the assets and liabilities of both companies, and calculated the noncontrolling interest based on the 10% ownership not acquired. [3]

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    2301949596_Firda Arfianti_LC53_CONSOLIDATION BALANCE SHEET Exercise 3-3

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    Prunce Company acquired 90% of Sun Company for $192,000 cash. [1] A journal entry was made to record the purchase. [2] A consolidated balance sheet was prepared that combined the assets and liabilities of both companies, and calculated the noncontrolling interest based on the 10% ownership not acquired. [3]

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    © All Rights Reserved
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    Download as pdf or txt
    318 views2 pages

    Firda Arfianti - LC53 - CONSOLIDATION BALANCE SHEET Exercise 3-3

    Uploaded by

    Firda
    Prunce Company acquired 90% of Sun Company for $192,000 cash. [1] A journal entry was made to record the purchase. [2] A consolidated balance sheet was prepared that combined the assets and liabilities of both companies, and calculated the noncontrolling interest based on the 10% ownership not acquired. [3]

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    Nama : Firda Arfianti

    NIM : 2301949596

    Kelas : LC53

    CONSOLIDATION BALANCE SHEET

    KERJAKAN EXERCISE 3-3 Consolidated Balance Sheet, Stock Purchase dari EBOOK HALAMAN 111

    EXERCISE 3-3 Consolidated Balance Sheet, Stock Purchase

    On January 2, 2019, Prunce Company acquired 90% of the outstanding common stock of Sun Company
    for $192,000 cash. Just before the acquisition, the balance sheets of the two companies were as
    follows:

    Prunce Sun

    Cash $260,000 $ 64,000

    Accounts receivable (net) 142,000 23,000

    Inventory 117,000 54,000

    Plant and equipment (net) 386,000 98,000

    Land 63,000 32,000

    Total asset $968,000 $271,000

    Accounts payable $104,000 $ 47,000

    Mortgage payable 72,000 39,000

    Common stock, $2 par value 400,000 70,000

    Other contributed capital 208,000 20,000

    Retained earnings 184,000 95,000

    Total equities $968,000 $271,000

    The fair values of Sun Company’s assets and liabilities are equal to their book values with the
    exception of land.

    Required:

    A. Prepare a journal entry to record the purchase of Sun Company’s common stock.

    Answer:

    Investment in Sun Company $192,000

    Cash $192,000
    B. Prepare a consolidated balance sheet at the date of acquisition.

    Answer:

    PRUNCE COMPANY AND SUBSIDIARY

    Consolidated Balance Sheet

    January 2, 2019

    Assets

    Cash ($260,000 + $64,000 - $192,000) $132,000

    Accounts Receivable ($142,000 + $23,000) 165,000

    Inventory ($117,000 + $54,000) 171,000

    Plant and Equipment (net) ($386,000 + $98,000) 484,000

    Land ($63,000 + $32,000 + $28,333*) 123,333

    Total Assets $1,075,333

    Liabilities and Stockholders’ Equity

    Accounts Payable ($104,000 + $47,000) $151,000

    Mortgage Payable ($72,000 + $39,000) 111,000

    Total Liabilities 262,000

    Noncontrolling Interest ($192,000 / 0.9 x 0.1) $21,333

    Common Stock 400,000

    Other Contributed Capital 208,000

    Retained Earnings 184,000

    Total Stockholders’ Equity 813,333

    Total Liabilities and Stockholders’ Equity $1,075,333

    Calculation:

    *[$192,000/0.9 – ($70,000 + $20,000 + $95,000)] = $28,333

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