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Byte Computer Corporation acquired 80 percent of Nofail Software Company’s stock

ID: 2329801 • Letter: B

Question

Byte Computer Corporation acquired 80 percent of Nofail Software Company’s stock on January 2, 20X3, by issuing bonds with a par value of $76,900 and a fair value of $94,400 in exchange for the shares. Summarized balance sheet data presented for the companies just before the acquisition are as follows:

Prepare a consolidated balance sheet immediately following the acquisition.

Byte Computer Nofail Software Corporation Company    Book Value Fair Value Book Value Fair Value   Cash $ 214,000 $ 214,000 $ 55,000 $ 55,000   Other Assets 416,000 416,000 139,000 139,000      Total Debits $ 630,000 $ 194,000      Current Liabilities $ 96,000 96,000 $ 76,000 76,000   Common Stock 287,000 55,000   Retained Earnings 247,000 63,000      Total Credits $ 630,000 $ 194,000

Explanation / Answer

Cash 269000 Other assets 555000 Total debits 824,000 Current liabilities 172000 Long term liabilities 76900 Common stock 287000 Retained earnings 288100 Total credits 824000