Professional Documents
Culture Documents
NIM: A031201061
Pop Corporation acquired 70 percent of the outstanding common stock of Son Corporation on January 1, 2016, for $350,00
was as follows (in thousands):
SON
POP
BV FV
assets
Cash $ 70,000 $ 40,000 $ 40,000
Receivables-net $ 160,000 $ 60,000 $ 60,000
Inventories $ 140,000 $ 60,000 $ 100,000
Land $ 200,000 $ 100,000 $ 120,000
Buildings-net $ 220,000 $ 140,000 $ 180,000
Equipment-net $ 160,000 $ 80,000 $ 60,000
Investment in son $ 350,000
Total Assets $ 1,300,000 $ 480,000 $ 560,000
Liabilites and stockholder's equity
Accounts payable $ 180,000 $ 160,000 $ 160,000
Other liabilites $ 20,000 $ 100,000 $ 80,000
Capital stock, $20 par $ 1,000,000 $ 200,000
Retained earnings $ 100,000 $ 20,000
Total equities $ 1,300,000 $ 480,000
2.
1. Cost Of 70% of son $ 350,000
Implied Value of son $ 500,000
Book Value ($20,000+ $20,000) $ 220,000
ECO BV $ 280,000
Allocated To
Inventories $ 40,000
Land $ 20,000
Building $ 40,000
Equipment $ (20,000)
Liabilites $ 20,000
Goodwill $ 180,000
$ 280,000
n January 1, 2016, for $350,000 cash. Immediately after this acquisition the balance sheet information for the two companies
Elimination Entry
Capital Stock $ 200,000
Inventories $ 40,000
Land $ 20,000
Building $ 40,000
Liabilites $ 20,000
Goodwill $ 180,000
Retaired Earning $ 20,000
Investment In son $ 350,000
Equipment $ 20,000
$ 520,000 $ 370,000
Non Controlling Interst $ 150,000
$ 110,000
$ 220,000
$ 240,000
$ 320,000
$ 400,000
$ 220,000
$ -
$ 180,000
$ 1,690,000
$ 340,000
$ 100,000
$ 1,000,000
$ 100,000
$ 150,000
$ 1,690,000
On March 31, 2014, Tobias AG purchased 90 percent of interest in Mark AG for $8,100,000 cash. Mark AG had unrecorde
Mark AG on March AG had unrecorded patents on this date for $100,000. The balance sheet summary of Mark AG on M
BV FV
cash $ 1,000 $ 1,000 Cost of 90% Mark Ag
inventories $ 1,600 $ 2,000 Implied Value Mark Ag
land $ 3,000 $ 4,000 Book Value ($2,000+52,200)
buidings-net $ 2,800 $ 2,500 ECO BV
equipment-net $ 3,900 $ 4,000
current liabiliites $ 900 $ 900 Allocated To
notes payable $ 1,800 $ 2,000 inventories
bounds payable $ 2,400 $ 2,000 land
common stock, $10 par $ 2,000 Building
retained earnings $ 5,200 Equipment
notes payable
Purchase 90% $ 8,100 bounds payable
Unrecord Paten $ 100,000 Paten
Goodwill
8,100,000 cash. Mark AG had unrecorded patents on this date for $100,000. The balance sheet summary of
alance sheet summary of Mark AG on March 31, 2014, was as follows (in thousands):