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Phoster Corporation established Skine Company as a wholly owned subsidiary

Accounting

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.)

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