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Homework answers / question archive / Phoster Corporation established Skine Company as a wholly owned subsidiary
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 $10 par value common stock:
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Amount Reported |
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Before Transfer |
After Transfer |
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Assets |
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Cash |
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$ |
47,000 |
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$ |
21,000 |
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Accounts Receivable |
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78,000 |
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33,000 |
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Inventory |
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37,000 |
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21,000 |
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Investment in Skine Company |
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96,000 |
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Land |
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19,000 |
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16,000 |
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Depreciable Assets |
$ |
191,000 |
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$ |
107,000 |
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Accumulated Depreciation |
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95,000 |
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96,000 |
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38,000 |
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69,000 |
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Total Assets |
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$ |
277,000 |
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$ |
256,000 |
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Liabilities and Equities |
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Accounts Payable |
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$ |
40,000 |
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$ |
19,000 |
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Bonds Payable |
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78,000 |
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78,000 |
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Common Stock |
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55,000 |
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55,000 |
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Retained Earnings |
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104,000 |
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104,000 |
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Total Liabilities and Equities |
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$ |
277,000 |
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$ |
256,000 |
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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.)
