*Ex. 201
On January 2, 2014, Parr Company purchased 100% of the ordinary shares of Sneed Company for $420,000. The fair value of Sneed Company’s assets and liabilities are equal to their book values except that land has a fair value of $120,000 and buildings have a fair value of $260,000.
Instructions
(a)Complete the worksheet below for preparing a consolidated statement of financial position. You may add accounts to the worksheet if necessary.
(b)Prepare a consolidated statement of financial position for Parr Company and Subsidiary on January 2, 2014.
PARR COMPANY AND SUBSIDIARY
Worksheet—Consolidated Statement of Financial Position
January 2, 2014 (Acquisition Date)
ParrSneedEliminationsConsolidated
CompanyCompanyDebits Credits Data
Assets
Land50,00080,000
Buildings (net)150,000170,000
Investment in Sneed
ordinary shares420,000
Current assets30,00040,000
Totals650,000290,000
Liabilities and Equity
Share capital—Parr370,000
Share capital—Sneed200,000
Retained earnings—Parr240,000
Retained earnings—Sneed60,000
Current liabilities40,00030,000
Totals650,000290,000