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Homework answers / question archive / On June 10, 2018, Game Corporation acquired 60 percent of Amber Company’s common stock

On June 10, 2018, Game Corporation acquired 60 percent of Amber Company’s common stock

Accounting

On June 10, 2018, Game Corporation acquired 60 percent of Amber Company’s common stock. The fair value of the noncontrolling interest was $25,600 on that date. Summarized balance sheet data for the two companies immediately after the stock purchase are as follows:

 

 

 

Game Corp.

 

Amber Company

 

 


 


 

   Item

 

Book Value

Book Value
 

Fair Value

  Cash

 

$

32,800     

$

10,000    

$

10,000    

 

  Accounts Receivable

 

 

45,000     

 

15,000    

 

15,000    

 

  Inventory

 

 

 86,000     

 

25,000    

 

30,000    

 

  Buildings & Equipment (net)

 

 

139,000     

 

54,000    

 

74,000    

 

  Investment in Amber Stock

 

 

 38,400     

 

 

 

 

 

 

 







 

  Total

 

$

341,200     

$

104,000    

$

129,000    

 

 

 













 

  Accounts Payable

 

$

23,000     

$

2,000    

 

2,000    

 

  Bonds Payable

 

 

210,200     

 

63,000    

 

63,000    

 

  Common Stock

 

 

44,000     

 

11,000    

 

 

 

  Retained Earnings

 

 

64,000     

 

28,000    

 

 

 

  

 







 

  Total

 

$

341,200     

$

104,000    

$

65,000    

 

 

 













 

 

 

Required:

 

a.
 

Record the consolidation entries required to prepare a consolidated balance sheet immediately after the purchase of Amber Company shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the basic consolidation entry.

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