5. Consolidated Balance Sheet a(a Plain Company acquired 80 percent of Swan Comp

Question

5. Consolidated Balance Sheet a(a Plain Company acquired 80 percent of Swan Company's stock on January 1, 2017, bonds with a par of $180,000 and a fair value of $162,000 in exchange for the shargs. Summarized balance sheet data follows: presented for the companies just before the acquisition are as Swan 0,00 $450,000 $112,500 $382,500 Plair ny Book Value Eair Value Book Value (Eair Value 900,000 900,000 27,000 270,000 S 225,000 225,000 $180,000 180,000 Cash Other Assets Total Assets H2,500 $1350,000 Current Liabilities Common Stock Retained Earnings Total Liabilities & Equity 675,000 112,500 o u0 SL350000 $382,500 Instructions: Prepare a consolidated balance sh your work to receive credit. You must show

Explanation / Answer

Plain company and its subsiduary

Consolidated Balance sheet .

As on January 1,2017

**Fair value of Net asset of swan company =Fair value of total asset -fair value of liabilities

            = [112500+270000] -180000

             = 202500

share of Plain : 202500*.80= 162000

Share of non controlling interest = 202500*.20 = 40500                      [100-80 = 20%]

Plain company and its subsiduary

Consolidated Balance sheet .

As on January 1,2017

Asset cash   [450000+112500] 562500 Other Asset [900000+270000] 1170000 Total asset 1732500 Liabilities and equity current liabilities [225000+180000] 405000 Bond payable [par value $ 180,000] 162000 common stock 675000 Retained earning 450000 Non controlling interest 40500 Total liabilities and equity 1732500

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