The separate balance sheets of Painter Corporation andSawyer Company following their business combination,in which Painter acquired all of Sawyer's outstandingcommon stock, were as follows:PAINTER CORPORATION AND SAWYER COMPANYSeparate Balance Sheets (following business combination)May 31, 2005PainterCorporationSawyerCompanyAssetsInventories$ 60,000Other current assetsInvestment in Sawyer Company common stockPlant assets (net)Goodwill (net)140,000$ 30,000110,000250,000220,000160,00010,000Total assets$680,000$300,000Liabilities and Stockholders' EquityCurrent liabilities$100,000$ 70,000Bonds payableCommon stock, $1 parAdditional paid-in capitalRetained earningsTotal liabilities and stockholders' equity104,00030,000200,00080,000116,00070,000160,00050,000$680,000$300,000On May 31, 2005, the current fair values of Sawyer's inventoriesand plant assets (net) were$40,000 and $180,000, respectively; the current fair valuesof its other assets and its liabilities were equal to theircarrying amounts. Prepare a consolidated balance sheet forPainter Corporation and its subsidiary on May 31, 2005.

Step 1: Consolidated Balance sheet for Painter Corporation and its subsidiary on May 31, 2005 :…

Answered: The separate balance sheets of Painter…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On August 31, 2020, Southampton Co. acquired all of the common stock of Brighton Company, which became a division of Southampton Co. Brighton Company reported the followir statement of financial position at the time of the acquisition: Brighton Company Statement of Financial Position Assets Equity and Liabilities Share capital- Plant assets (ne t) $1,350,000 $1,150,000 ordinary 235,000 Retained earnings Inventory Receivables 1,070,000 587.000 800,000 Accounts payable Cash 422.000 Total assets $2.807.000 Total equity and liabilities $2.807.000 An appraisal indicated that the fair value of the inventory was $372,000 and the fair value of the plant assets was $1,550,000. The agreed purchase price was $3,600,000, and this amount was paid in cash to the previous owners of Brighton Company. Required: a. Prepare the entry to record the purchase of Brighton Company. b. Assume that the carrying amount of Brighton Company division's net assets, including goodwill is $2.550,000. The recoverable…
The December 31, 20x8, balance sheets for Pint Corporation and its 70 percent-owned subsidiary Saloon Company contained the following summarized amounts: Assets Cash and Receivables Inventory Buildings and Equipment (net) Investment in Saloon Company Total Assets Liabilities and Equity Accounts Payable Common Stock Retained Earnings Total Liabilities and Equity PINT CORPORATION AND SALOON COMPANY Balance Sheets December 31, 20x8 view transaction list Consolidation Worksheet Entries A B < Pint acquired the shares of Saloon Company on January 1, 20X7. On December 31, 20X8, assume Pint sold Inventory to Saloon during 20X8 for $105,000 and Saloon sold Inventory to Pint for $309,000. Pint's balance sheet contains Inventory Items purchased from Saloon for $100,000. The Items cost Saloon $60,000 to produce. In addition, Saloon's Inventory contains goods it purchased from Pint for $27,000 that Pint had produced for $16,200. Assume Saloon reported net Income of $72,000 and dividends of $14,400.…
On January 1, 2017, Unilever Corporation purchased 75% of the ordinary shares of High Tide Enterprises. Separate balance sheet for the two companies at the combination date are given belowAccounts Unilever High TideCurrent assets P120,000 P108,000Land 31,200 12,800Plant assets 280,000 120,000Accumulated depreciation (96,000) (24,000)Inv. In High Tide Ent. 156,800Totals 492,000 216,800Accounts payable 82,400 56,800Ordinary shares 320,000 120,000Retained earnings 89,600 40,000Totals 492,000 216,800At the date of combination, the net assets of High Tide are fairly valued, except for its inventory which is understated by P8,800. The amount of non-controlling interests assigned at…
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On January 1, 20X2, Plend Corporation acquired all of Stork Corporation's assets and liabilities by issuing shares of its common stock. Partial balance sheet data for the companies prior to the business combination and immediately following the combination are as follows: Plend Corporation Stork Corporation Combined Entity Book Value Book Value Assets Cash $ 52,000 $ 22,000 $ 74,000 Accounts Receivable 72,000 42,000 112,000 Inventory 62,000 47,000 120,000 Buildings and Equipment (net) 312,000 122,000 454,000 Goodwill ? Total Assets $ 498,000 $ 233,000 $ ? Liabilities and Equities Accounts Payable $ 44,000 $ 26,000 $ 70,000 Bonds Payable 162,000 82,000 244,000 Bond Premium 6,000 6,000 Common Stock, $5 par 112,000 52,000 139,500 Additional Paid-In Capital 77,000 40,000 335,500 Retained Earnings 97,000 33,000 ? Total Liabilities and Equities $ 498,000 $ 233,000 $ ? Required: What number of shares did Plend issue to acquire…
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LGM Motors acquired 80% of NS Service Center outstanding shares on January 1, 2022 by paying cash. The consolidated statement of financial position showed the following balances at the date of acquisition. Consolidated Balances Amount Total Assets 15,670,000 Total Liabilities 4,575,000 Total Shareholder’s Equity ? The book value of the net assets of NS Services Center is P4,500,000. The assets of NS Service Center are fairly valued except for the following: Patent on the product that is deemed worthless, P50,000. Goodwill of P150,000. Unrecognized identifiable R&D of P75,000. The fair value of the non-controlling interest is 705,000 and the book value of LGM’s equity balance is P9,500,000. On December 31, 2022 the following information were provided by NS Services Center: Net income of 400,000 was Patents remaining useful life is 4 Pre-existing goodwill presented above was impaired with a current value of 120,000. Dividends were declared…

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