Power Company owns 90 percent of Pleasantdale Dairy’s stock. The balance sheets
ID: 2511863 • Letter: P
Question
Power Company owns 90 percent of Pleasantdale Dairy’s stock. The balance sheets of the two companies immediately after the Pleasantdale acquisition showed the following amounts:
The fair value of the noncontrolling interest at the date of acquisition was determined to be $31,300. The full amount of the increase over book value is assigned to land held by Pleasantdale. At the date of acquisition, Pleasantdale owed Power $10,000 plus $900 accrued interest. Pleasantdale had recorded the accrued interest, but Power had not.
Prepare a consolidated balance sheet worksheet. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)
WER COMPANY AND SUBSIDIARY
Consolidated Balance Sheet Worksheet
Consolidation Entries
Pleasantdale
Power Co. Dairy DR CR Consolidated
Assets
Cash and receivables
Inventory
Land
Buildings and equipment (net)
Investment in Pleasantdale Dairy
Total Assets
Liabilities & Equity
Current payables
Long-term liabilities
Common stock
Retained earnings
NCI in NA of Pleasantdale Dairy
Total Liabilities & Equity
Power Company owns 90 percent of Pleasantdale Dairy’s stock. The balance sheets of the two companies immediately after the Pleasantdale acquisition showed the following amounts:
Explanation / Answer
Computation of Book Value At Acquisition Allocation of Differential in Fair Value & Book Value Common Stock & Retained Earning Balance ($217000+76000) $293,000.00 Investment shown as per Power Co. $281,700.00 Book Value of Investment $263,700.00 Non Controlling Interest (10%*293000) $29,300.00 Difference on a/c of Power due to Land $18,000.00 Power Co. (90%*293000) $263,700.00 Difference On a/c of NCI due to Land ($1800/90%)*10% $2,000.00 Consolidated Balance Sheet Power Co. Pleasantdale Dairy Elimination Entries Consolidated DR CR Balance Sheet Cash and Receivables $142,900 $72,000 $1,900 $213,000 Inventory $214,000 $92,000 $306,000 Land $90,000 $60,000 $20,000 $170,000 Buildings & Equipment (net) $409,000 $231,000 $640,000 Investment in Pleasantdale Dairy $281,700 $263,700 $0 $18,000 Total Assets $1,137,600 $455,000 $20,000 $283,600 $1,329,000 Current Payables $75,000 $22,000 $1,900 $95,100 Long-Term Liabilities $307,700 $140,000 $447,700 Common Stock $382,000 $76,000 $76,000 $382,000 Retained Earnings $372,900 $217,000 $217,000 $372,900 NCI in NA of Pleasantdale Dairy $29,300 Increase in Fair Value of NCI by $2,000 $31,300 Total Liabilities & Equity $1,137,600 $455,000 $294,900 $32,300 $1,329,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.