Phoster Corporation established Skine Company as a wholly owned subsidiary. Phoster reported the following balance sheet amounts immediately before and after it transferred assets and accounts payable to Skine Company in exchange for 4,000 shares of $10 par value common stock: Amount Reported Before Transfer After Transfer Assets Cash $ 47,000 $ 21,000 Accounts Receivable 78,000 33,000 Inventory 37,000 21,000 Investment in Skine Company 96,000 Land 19,000 16,000 Depreciable Assets $ 191,000 $ 107,000 Accumulated Depreciation 95,000 96,000 38,000 69,000 Total Assets $ 277,000 $ 256,000 Liabilities and Equities Accounts Payable $ 40,000 $ 19,000 Bonds Payable 78,000 78,000 Common Stock 55,000 55,000 Retained Earnings 104,000 104,000 Total Liabilities and Equities $ 277,000 $ 256,000 Required: a. & b. Prepare the journal entry that Phoster recorded when it transferred the assets to Skine, and the entry that Skine recorded for the receipt of assets and issuance of common stock to Phoster.

Trusted by Students Everywhere

Google USA

Why Choose Us?

0% AI Guarantee

Human-written only.

24/7 Support

Anytime, anywhere.

Plagiarism Free

100% Original.

Expert Tutors

Masters & PhDs.

100% Confidential

Your privacy matters.

On-Time Delivery

Never miss a deadline.

Phoster Corporation established Skine Company as a wholly owned subsidiary

Accounting Mar 06, 2021

Phoster Corporation established Skine Company as a wholly owned subsidiary. Phoster reported the following balance sheet amounts immediately before and after it transferred assets and accounts payable to Skine Company in exchange for 4,000 shares of $10 par value common stock:

	Amount Reported
	Before Transfer				After Transfer
Assets
Cash			$	47,000			$	21,000
Accounts Receivable				78,000				33,000
Inventory				37,000				21,000
Investment in Skine Company								96,000
Land				19,000				16,000
Depreciable Assets	$	191,000			$	107,000
Accumulated Depreciation		95,000		96,000		38,000		69,000
Total Assets			$	277,000			$	256,000
Liabilities and Equities
Accounts Payable			$	40,000			$	19,000
Bonds Payable				78,000				78,000
Common Stock				55,000				55,000
Retained Earnings				104,000				104,000
Total Liabilities and Equities			$	277,000			$	256,000

Required:
a. & b. Prepare the journal entry that Phoster recorded when it transferred the assets to Skine, and the entry that Skine recorded for the receipt of assets and issuance of common stock to Phoster. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Expert Solution

PFA

Download Solution Attachment (PDF/Doc)

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote