Bal Corp- BV Bal Corp-FV Excess/Differential

Cash 200000 200000 -

Receivables-net 300000 300000 -
Inventories 300000 500000 200000 dr
Land 500000 600000 100000 dr
Buildings-net 700000 900000 200000 dr
Equipment-net 400000 300000 -100000 cr
Accounts Payable 800000 800000 -
Other Liabilities 500000 400000 100000 dr
Amount allocated to identifiable net assets 500000 dr
Goodwill 780000 dr
Total Excess of FV over the Book Value 1280000

Requirement:

a.) Books of Pen Co.

Investment in Bal Corp 1780000
Cash 1780000

b.)
Determination of Excess/Differential
FV of Co. as a whole 2380000
Less: BV of Net Assets of Subsidiary 1100000
Total Excess of FV over the Book Value 1280000

c.) Consolidation Working Papers Entries

Share Capital 1000000
Retained Earnings 100000
Inventories 200000
Land 100000
Buildings-net 200000
Other Liabilities 100000
Goodwill 780000
Equipment-net 100000
Investment in Bal Corp 1780000
NCI 600000
Consideration Transferred
Ordinary Share -
Cash 1780000 1780000 70%
NCI 600000 30%
FV of Co. as a whole 2380000
Less: FV of Net asset
Total Assets 2800000
Total Liabilities 1200000 1600000
Goodwill 780000