Power Company owns 90 percent of Pleasantdale Dairy\'s stock. The balance stocks

Question

Power Company owns 90 percent of Pleasantdale Dairy's stock. The balance stocks of the two companies immediately after the Pleasantdale acquisition showed the following amounts: The fair value of the noncontrolling interest at the date of acquisition was determined to be $31,500. The full amount of the increase over book value is assigned to land hold by Pleasantdale. At the date of acquisition, Pleasantdale owed Power $12,000 plus $1,400 accrued interest. Pleasantdale had recorded the accrued interest but Power had not. Required: Prepare a consolidated balance sheet worksheet. (Value in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)

Explanation / Answer

Answer:

Particulars Power co. Pleasantdale Dairy Dr. Cr. Consolidated Balance sheet Cash and receivable 143400 77000 13400 207000 Inventory 228000 97000 325000 Land 86000 51000 30000 167000 Building & equipment (net) 395000 229000 624000 Investment in Pleasantdale Dairy 283500 256500 27000 Total Assets 1135900 454000 30000 296900 1323000 Current Payables 64000 38000 13400 88600 Long term liabilities 316500 131000 447500 Common stock 382000 76000 76000 382000 Retained earnings 373400 209000 209000 373400 NCI in NA Pleasantdale Dairy 28500 31500 3000 Total liabilities and equity 1135900 454000 298400 28500 1323000

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