On December 31, 2016, Parent Company purchased 80% of the common stock of Subsidiary Company for $280,000.On this date, Subsidiary had total owners' equity of $250,000 (common stock $20,000; other paid-in capital, $80,000; and retained earnings, $150,000).Any excess of cost over book value is due to the under or overvaluation of certain assets and liabilities.Inventory is undervalued $5,000.Land is undervalued $20,000.Buildings and equipment have a fair value which exceeds book value by $30,000.Bonds payable are overvalued $5,000.The remaining excess, if any, is due to goodwill.
?
Required:
?
a.Prepare a value analysis schedule for this business combination.?
?
b.Prepare the determination and distribution schedule for this business combination
?
?
c.Prepare the necessary elimination entries in general journal form.

Question

Quizplus · Accepted Answer

The Answer of On December 31, 2016, Parent Company purchased 80% of the common stock of Subsidiary Company for $280,000.On this date, Subsidiary had total owners' equity of $250,000 (common stock $20,000; other paid-in capital, $80,000; and retained earnings, $150,000).Any excess of cost over book value is due to the under or overvaluation of certain assets and liabilities.Inventory is undervalued $5,000.Land is undervalued $20,000.Buildings and equipment have a fair value which exceeds book value by $30,000.Bonds payable are overvalued $5,000.The remaining excess, if any, is due to goodwill.
?
Required:
?
a.Prepare a value analysis schedule for this business combination.?
?
b.Prepare the determination and distribution schedule for this business combination
?
?
c.Prepare the necessary elimination entries in general journal form.

On December 31, 2016, Parent Company Purchased 80% of the Common