Fineline Pencil Company acquired 80 percent of Smudge Eraser Corporations stock on January 2, 20X3,...
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Accounting
| Fineline Pencil Company acquired 80 percent of Smudge Eraser Corporations stock on January 2, 20X3, for $104,000 cash. Summarized balance sheet data for the companies on December 31, 20X2, are as follows: |
| Fineline Pencil Company | Smudge Eraser Corporation | ||||||||||||
| Book Value | Fair Value | Book Value | Fair Value | ||||||||||
| Cash | $ | 210,000 | $ | 210,000 | $ | 64,000 | $ | 64,000 | |||||
| Other Assets | 401,000 | 401,000 | 133,000 | 133,000 | |||||||||
| Total Debits | $ | 611,000 | $ | 197,000 | |||||||||
| Current Liabilities | $ | 87,000 | 87,000 | $ | 67,000 | 67,000 | |||||||
| Common Stock | 285,000 | 64,000 | |||||||||||
| Retained Earnings | 239,000 | 66,000 | |||||||||||
| Total Credits | $ | 611,000 | $ | 197,000 | |||||||||
| Required: |
| Prepare a consolidated balance sheet immediately following the acquisition. |
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