Texts: ACG4201Ch4i
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On June 10, 20X8, Playoff Corporation acquired 100 percent of Series Company's common stock. Summarized balance sheet data for the two companies immediately after the stock acquisition are as follows:
33.33 points
Item Cash Accounts Receivable Inventory Buildings and Equipment (net) Investment in Series Company Total
Playoff Corporation $20,000 $40,000 $88,000 $139,000 $140,000 $427,000
Accounts Payable Bonds Payable Common Stock Retained Earnings Total
Playoff Corporation $22,000 $145,000 $42,000 $218,000 $427,000
Series Company Book Value Fair Value
Cash $10,000 $10,000
Accounts Receivable $20,000 $20,000
Inventory $22,000 $27,000
Buildings and Equipment (net) $55,000 $75,000
Total $107,000 $132,000
Accounts Payable $4,000 $4,000
Bonds Payable $15,000 $15,000
Common Stock $16,000 $19,000
Retained Earnings $72,000 No journal entry required
Total $107,000 $132,000
Required:
a. Prepare the consolidating entries required to prepare a consolidated balance sheet immediately after the acquisition of Series Company shares. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
References
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iX
A Record the basic consolidation entry
B
Record the excess value (differential) reclassification entry.