*Ex. 202
On January 2, 2014, Pine Company purchased 100% of the outstanding common shares of Seely Company for $520,000. Any excess of cost over the book value of the net assets of Seely company should first be allocated to land $55,000, and Buildings $40,000 and any remainder to Goodwill.
Instructions
(a)Complete the following worksheet below for preparing a consolidated statement of financial position on the date of acquisition. You may add accounts to the worksheet that may be necessary.
(b)Prepare a consolidated statement of financial position for Pine Company and Subsidiary on January 2, 2014.
PINE COMPANY AND SUBSIDIARY
Worksheet—Consolidated Statement of Financial Position
January 2, 2014 (Acquisition Date)
PineSeelyEliminationsConsolidated
CompanyCompanyDebits Credits Data
Assets
Land20,000150,000
Buildings (net)150,000250,000
Investment in Seely
ordinary shares520,000
Current assets120,00070,000
Totals810,000470,000
Liabilities and Equity
Share capital—Pine500,000
Share capital—Seely270,000
Retained earnings—Pine250,000
Retained earnings—Seely130,000
Current liabilities60,00070,000
Totals810,000470,000
*