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Homework answers / question archive / Top Corporation acquired 100 percent of Sun Corporation's common stock on December 31, 2012

Top Corporation acquired 100 percent of Sun Corporation's common stock on December 31, 2012

Accounting

Top Corporation acquired 100 percent of Sun Corporation's common stock on December 31, 2012. Balance sheet data for the two companies immediately following the acquisition follow:

 

             Item

Top  Corporation

Sun
Corporation

  Cash

 

$

49,000

 

 

$

  30,000

 

 

  Accounts Receivable

 

 

110,000

 

 

 

45,000

 

 

  Inventory

 

 

130,000

 

 

 

70,000

 

 

  Land

 

 

80,000

 

 

 

25,000

 

 

  Buildings & Equipment

 

 

500,000

 

 

 

400,000

 

 

  Less: Accumulated Depreciation

 

 

(223,000

)

 

 

(165,000

)

 

  Investment in Sun Corporation Stock

 

 

198,000

 

 

 

 

 

 

 

 




 




 

  Total Assets

 

$

844,000

 

 

$

405,000

 

 

 

 







 







 

  Accounts Payable

 

$

61,500

 

 

$

28,000

 

 

  Taxes Payable

 

 

95,000

 

 

 

37,000

 

 

  Bonds Payable

 

 

280,000

 

 

 

200,000

 

 

  Common Stock

 

 

150,000

 

 

 

50,000

 

 

  Retained Earnings

 

 

257,500

 

 

 

90,000

 

 

 

 




 




 

  Total Liabilities & Stockholders’ Equity

 

$

844,000

 

 

$

405,000

 

 

 

 







 







 


                     

 

At the date of the business combination, the book values of Sun's net assets and liabilities approximated fair value except for inventory, which had a fair value of $85,000, and land, which had a fair value of $45,000.

Required:

For each question, indicate the appropriate total that should appear in the consolidated balance sheet prepared immediately after the business combination.

 

1.

What amount of inventory will be reported?

 

2.  What amount of goodwill will be reported?

 

3. What amount of total assets will be reported?

 


4.  What amount of total liabilities will be reported?

 

5. What amount of consolidated retained earnings will be reported?

 

6.    What amount of total stockholders’ equity will be reported?

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