On January 2, 2019, Prunce Company acquired 90% of the outstanding common stock of Sun Company

for $192,000 cash. Just before the acquisition, the balance sheets of the two companies were as follows:
Prunce Sun
Cash $ 260,000 $ 64,000
Account receivable (net) 142,000 23,000
Inventory 117,000 54,000
Plant and equipment (net) 386,000 98,000
Land 63,000 32,000
Total assets $ 968,000 $ 271,000

Account payable $ 104,000 $ 47,000

Mortage payable 72,000 39,000
Common stock, $2 par value 400,000 70,000
Other contributed capital 208,000 20,000
Retained earnings 184,000 95,000
Total equities $ 968,000 $ 271,000

The fair values of Sun Company’s assets and liabilities are equal to their book values with the exception
of land.

A. Prepare the journal entry to record the purchase of Sun Company's common stock.
Investment in S Company 192,000
Cash 192,000

B. Prepare a consolidated balance sheet at the date of acquisition.

P Share Non Controlling Total Value
Purchase price & implied value 192,000 21,333 213,333
Less: BV of subsidiary equity
Common Stock 63,000 7,000 70,000
Other Contributed Capital 18,000 2,000 20,000
Retained Earning 85,500 9,500 95,000
Total BV 166,500 18,500 185,000
Difference between IV&BV 25,500 2,833 28,333
Land (25,500) (2,833) (28,333)
Balance - - -

Journal:
Common Stock 70,000
Other Contributed Capital 20,000
Retained Earnings 95,000
Difference between IV & BV 28,333
Investment in S 192,000
NCI 21,333
Land 28,333
Dfference between IV & BV 28,333

Consolidated Balance Sheet Workpaper

Prunce Company & Subsidiary
January 2 2019
Asset: P Comp S Comp Debit Credit NCI Consolidated
Cash 68,000 64,000 132,000
A/R 142,000 23,000 165,000
Inventory 117,000 54,000 171,000
PPE 386,000 98,000 484,000
Land 63,000 32,000 28,333 123,333
Investment 192,000 192,000 0
Difference 28,333 28,333 0
Total Asset 968,000 271,000 56,667 220,333 1,075,333

Liabilities:
A/P 104,000 47,000 151,000
Mortage Payable 72,000 39,000 111,000
Common Stock
P Comp 400,000 400,000
S Comp 70,000 70,000 0
OCC
P Comp 208,000 208,000
S Comp 20,000 20,000 0
R/E
P Comp 184,000 184,000
S Comp 95,000 95,000 0
NCI 21,333 21,333
Total Liab & Equity 968,000 271,000 185,000 21,333 1,075,333