Consolidated Balance Sheet, Stock Purchase On January 2, 2011, Prunce Company acquired 90% of the outstanding common stock of Sun Company for $192,000 cash. Just before the acquisition, the balance...

Consolidated Balance Sheet, Stock Purchase

On January 2, 2011, 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:

	Aimee	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:

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

Prepare a consolidated balance sheet at the date of acquisition.

Answered Same DayDec 24, 2021

Answer To: Consolidated Balance Sheet, Stock Purchase On January 2, 2011, Prunce Company acquired 90% of the...

David answered on Dec 24 2021

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Consolidated Balance Sheet, Stock Purchase
On January 2, 2011, 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:

Aimee 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...

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Consolidated Balance Sheet, Stock Purchase On January 2, 2011, Prunce Company acquired 90% of the outstanding common stock of Sun Company for $192,000 cash. Just before the acquisition, the balance...

Answer To: Consolidated Balance Sheet, Stock Purchase On January 2, 2011, Prunce Company acquired 90% of the...

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