Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. power corporation acquired 100 percent ownership o

Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the...

90.2K

Verified Solution

Question

Accounting

Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the date of acquisition, Scrub Company reported assets and liabilities with book values of $424,000 and $173,000, respectively, common stock outstanding of $97,000, and retained earnings of $154,000. The book values and fair values of Scrubs assets and liabilities were identical except for land, which had increased in value by $23,000, and inventories, which had decreased by $8,000.

a. Prepare the following consolidation entries required to prepare a consolidated balance sheet immediately after the business combination assuming Power acquired its ownership of Scrub for $276,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Prepare the following consolidation entries required to prepare a consolidated balance sheet immediately after the business combination assuming Power acquired its ownership of Scrub for $247,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students