Question Two (10 Points): On October 7, 2008, X Corporation acquires 90% of Y Conpany's...
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Question Two (10 Points): On October 7, 2008, X Corporation acquires 90% of Y Conpany's common stock in a purchase business combination with $ 234,000 cash. The item of land in Y's balance sheet appears $ 50,000, while its market value at acquisition date amounted $10,000. balance sheets of the two companies just prior to the acquisition: Conpany X Conpany Y 400,000 400,000 Item Assets Current assets (cash, A/R, inventory) Net fixed assets (equipment, building less deprecation) Land Total Liabilities & Owner's Equity Liabilities (A/P, notes payable, bonds payable) Common stock Retained earnings Total Liabilities & Owner's Equity 110,000 200,000 50,000 360,000 800,000 280,000 400,000 120,000 800,000 60,000 200,000 100,000 360,000 Required 1. Journal entry to record acquisition of the net assets of Conpany Y by Company X. 2. Balance sheet of Conpany X subsequent to asset acquisition. 3. Consolidated working sheet and Consolidated Balance Sheet
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