On December 31, 20X8, Parkway Corporation acquired 80 percent of Street Company's common stock for $104,000 cash. The fair value of the noncontrolling interest at that date was determined to be $26,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Parkway Corporation Street Company Cash $ 90,000 $ 20,000 Accounts Receivable 80,000 35,000 Inventory 100,000 40,000 Land 40,000 60,000 Buildings and Equipment 300,000 100,000 Less: Accumulated Depreciation (100,000) (40,000) Investment in Street Company 104,000 Total Assets $ 614,000 $ 215,000 Accounts Payable 120,000 30,000 Mortgage Payable 200,000 100,000 Common Stock 50,000 25,000 Retained Earnings 244,000 60,000 Total Liabilities and Equity $ 614,000 $ 215,000 On that date, the book values of Street's assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and buildings and equipment, which had a fair value of $100,000. At December 31, 20X8, Parkway reported accounts payable of $15,000 to Street, which reported an equal amount in its accounts receivable. Required: 1) Provide the consolidating entries needed to prepare a consolidated balance sheet immediately following the business combination. 2) Prepare a consolidated balance sheet worksheet.

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 December 31, 20X8, Parkway Corporation acquired 80 percent of Street Company's common stock for $104,000 cash. The fair value of the noncontrolling interest at that date was determined to be $26,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:

	Parkway Corporation	Street Company
Cash	$ 90,000	$ 20,000
Accounts Receivable	80,000	35,000
Inventory	100,000	40,000
Land	40,000	60,000
Buildings and Equipment	300,000	100,000
Less: Accumulated Depreciation	(100,000)	(40,000)
Investment in Street Company	104,000
Total Assets	$ 614,000	$ 215,000
Accounts Payable	120,000	30,000
Mortgage Payable	200,000	100,000
Common Stock	50,000	25,000
Retained Earnings	244,000	60,000
Total Liabilities and Equity	$ 614,000	$ 215,000

On that date, the book values of Street's assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and buildings and equipment, which had a fair value of $100,000. At December 31, 20X8, Parkway reported accounts payable of $15,000 to Street, which reported an equal amount in its accounts receivable.

Required:

1) Provide the consolidating entries needed to prepare a consolidated balance sheet immediately following the business combination.

2) Prepare a consolidated balance sheet worksheet.

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