Ex. 170
Weaver Company has the following data at December 31, 2011 for its securities.
Securities Cost Fair Value
Trading$90,000$92,000
Available-for-sale74,00071,000
Instructions
(a)Prepare the adjusting entries to report the securities at fair value.
(b)Indicate the statement presentation of the related unrealized gain (loss) accounts for each class of securities.
*Ex. 171
On January 2, 2011, Parr Company purchased 100% of the common stock of Sneed Company for $350,000. The fair market value of Sneed Company’s assets and liabilities are equal to their book values except that land has a fair market value of $100,000 and buildings have a fair market value of $220,000.
Instructions
(a)Complete the worksheet below for preparing a consolidated balance sheet. You may add accounts to the worksheet if necessary.
(b)Prepare a consolidated balance sheet for Parr Company and Subsidiary on January 2,2011.
*Ex. 172
On January 2, 2011, Pine Company purchased 100% of the outstanding common shares of Seely Company for 550,000. Any excess of cost over the book value of the net assets of Seely company should first be allocated to $70,000, and Buildings $50,000 and any remainder to Goodwill.
Instructions
(a)Complete the following word below for preparing a consolidated balance sheet on the date of acquisition. You may add accounts to the work sheet that may be necessary.
(b)Prepare a consolidated balance sheet for Pine Company and Subsidiary on January 2, 2011.
PARR COMPANY AND SUBSIDIARY
Word—Consolidated Balance Sheet
January 2, 2011 (Acquisition Date)
PineSneedEliminationsConsolidated
CompanyCompanyDebits Credits Data
Assets
Current assets90,00070,000
Investment in Seely
common stock550,000
Land20,000150,000
Buildings (net)150,000250,000
Totals810,000470,000
Liabilities and Stockholders' Equity
Current liabilities40,00070,000
Common stock—Parr500,000
Common stock—Sneed270,000
Retained earnings—Parr270,000
Retained earnings—Sneed130,000
Totals810,000470,000
*Ex. 173
The separate balance sheets of Platt Company and its wholly owned subsidiary, Speer Company, as of the date of acquisition are shown below:
Consolidated
Assets Platt Speer Data
Cash$ 150,00$ 57,000
Accounts Receivable 240,000 283,000
Inventory 100,000 300,000
Equipment (net) 300,000 486,000
Investment in Speer Co. 830,000
Totals$1,620,000$1,126,000
Liabilities and Stockholders' Equity
Accounts Payable 250,000 146,000
Bonds Payable 120,000 150,000
Common Stock1,000,000 650,000
Equipment (net) 250,000 180,000
Investment in Speer Co. 830,000
Totals$1,620,000$1,126,000
Instructions
Provide the amount that should appear in the Consolidated Data column for each of the selected accounts. If the account should not appear in the Consolidated Data column, indicate "None." Assume that all accounts have normal balances and that Speer Company stock was acquired for cash at a price equal to its book value.