Answer:
Explanation:
The objective here is to prepare the consolidated balance sheet at the date of acquisition by placing the appropriate entries in their respective debit/credit column cells.
To do that; We need to find both Consolidation entries and Consolidation Spreadsheet on the acquisition date from the given data set from the question.
From the question:
A parent company acquires a 70% interest in a subsidiary for a purchase price of $1,078,000.
Consideration paid by the parent company for 70% share $10,78,000
Non Control Interest fair Value (30%) <u> $ 4,62,000 </u>
Total fair value of subsidiary on the acquisition date $15,40,000
<u>Less: Book value subsidiary on the acquisition date</u>
Common Stock 90,000
APIC 1,20,000
Retained earnings 7,30,000 <u> $9,40,000 </u>
Fair value in excess of book value $6,00,000
Excess fair value allocated to:
undervalued building $1,00,000
unrecorded patent $2,00,000
Goodwill <u> $3,00,000</u>
Balance $0
Consolidation entries and Consolidation Spreadsheet on the acquisition date are being embedded in the word document attached below due to vast columns of table sets that this answering box cannot contain.