Homework answers / question archive / 1

1

Accounting

Share With

1. Pencil Company acquired 80 percent of Stylus Corporation’s stock on January 2, 20X3, for $88,800 cash. Summarized balance sheet data for the companies on December 31, 20X2, follow:
 

 
Required:
Prepare a consolidated balance sheet immediately following the acquisition.

2. Pepper Corporation owns 70 percent of Salt Company’s stock. In the 20X9 consolidated income statement, the noncontrolling interest was assigned $18,000 of income. There was no differential in the acquisition.
 
Required:
What amount of net income did Salt Company report for 20X9?

3. Plug Motors’ accountant was called away after completing only half of the consolidated statements at the end of 20X4. The data left behind included the following:
 

 
Required:
a. Plug Motors acquired shares of Spark Body Shop at underlying book value on January 1, 20X1. What portion of the ownership of Spark Body Shop does Plug apparently hold?

b. Compute the consolidated totals for each of the remaining balance sheet items.