Pennant Corp. owns 70% of the common stock of Scarvens Co. Scarvens\' revenues f

Question

Pennant Corp. owns 70% of the common stock of Scarvens Co. Scarvens' revenues for 2015 totaled $200,000.

Required: What amount of Scarvens' revenues would be included in the consolidated revenues under the acquisition method of accounting for business combinations?

On January 1, 2015, Elva Corp. paid $750,000 for 80% of Fenton Co. when the book value of Fenton's net assets was $800,000. Fenton owned a building with a fair value of $150,000 and a book value of $120,000.

Required: At what amount would the building appear on a consolidated balance sheet prepared immediately after the combination, under the acquisition method of accounting for business combinations?

Explanation / Answer

1.Scarven'S revenue $ 200,000

Scarven"s portion of consolidated $ 200,000

2.Book value of building $120,000

Allocation of difference (30,000)*80% 24000

Consolidated balance sheet amount for fenton's building $ 144000

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.