On December31, 2011, Purple Corp. purchased Sand Company for: 20,000,000 Sand Co

Question

On December31, 2011, Purple Corp. purchased Sand Company for: 20,000,000 Sand Compary's balance sheet at the time of acquisition is provided below 80% | of the outstanding common stock of Difference BV vs. FV Cash Account Receivable Irwentory Plant and Eqprent Building-HQ Land Balanoe Sheet 12/31/2011 $250,000 $ 1.500,000 $ 7,000,000 $14,000,000 $ 2,000,000 $250,000 $ 25,000000 Fair Value 12/31/2011 $ 250,000 $ $ 1,500,000$ $ 4,000,000(3,000,000) $14,000,000$ $ 2,000,000$ $ 2,250,000$ $24,000,000$(1,000,000) 2,000,000 Total Assets iabilities Mortpage Long-term debt $ 4500,000 $ 6,500,000 $ 3,500,000 $14,500,000 $ 4500,000$ $ 6,500,000$ $ 3,000,000$ $14,000,000$ 500,000 500,000 Total Liahilities Common Stock, $1 par value APIC RE Sub Total Treasury Shares (3,000shares) Total Equity $150,000 $ 3,400,000 $ 8,100,000 $11,6s0,000 $ 1,150,000 $10500,000 $ 25,000000 Based on the above data, prepare the elimination entries necessary to complete the consolidated financial statement workpaper. Instructor- Prepare the CAD fist The AD been partily completed below. Percentage Puchased 80% 100% Total Imolied Panent $2D,000,000 $ 8,400,000 $11,600,000 NCI Fair Value Given Book Value Received $ 5,000,000$25,000,000 $ 2,100,000$ 10,500,000 $ 2,900,000$ 14500,000 Difference

Explanation / Answer

CAD

Fair value adjustment:

Elimination entry:

Fair value of consideration given: Ref Particulars Amount Cash     2,00,00,000 a Total consideration     2,00,00,000 b Stake acquired 80% c=a/b Fair value of subsidiary     2,50,00,000 d=100%-b Minority interest 20% e=c*d Fair value of minority interest        50,00,000

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