Reporting of Stockholders\' Equity in Consolidation Baylor Company purchased 75%

Question

Reporting of Stockholders' Equity in Consolidation Baylor Company purchased 75% of the common stock of Reed Company for $600,000 in cash when the stockholders' equity of Reed Company consisted of $500,000 in common stock and $300,000 in retained earnings. On the acquisition date, the stockholders' equity of Baylor Company consisted of $900,000 in common stock and $440,000 in retained earnings. Prepare the stockholders' equity section in the consolidated balance sheet as of the acquisition date. Stockholders' Equity Common stock Retained earnings 0 X Baylor Company shareholders' equity $ Noncontrolling interests 0 X Total equity

Explanation / Answer

Common stock= 900000

Retained earnings= 440000

Baylor Company shareholders equity= 1340000

Noncontrolling interests= 200000

Total equity= 1540000

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