100% purchase, bargain, elimination entries only. On March 1, 20X5, Carlson Enterprises purchased a 100% interest in Express Corporation for $400,000. Express Corporation had the following balance sheet on February 28, 20X5:
|
Express Corporation |
|||
|
Assets |
Liabilities and Equity |
||
|
Accounts receivable |
$60,000 |
Current liabilities |
$50,000 |
|
Inventory |
80,000 |
Bonds payable |
100,000 |
|
Land |
40,000 |
Common stock |
50,000 |
|
Buildings |
300,000 |
Paid in capital in excess of par |
250,000 |
|
Accum depr—building |
120,000 |
Retained earnings |
70,000 |
|
Equipment |
220,000 |
||
|
Accum depr—equipment |
60,000 |
||
|
Total assets |
$520,000 |
Total liabilities and equity |
$520,000 |
Carlson Enterprises received an independent appraisal on the fair values of Express Corporation’s assets. The controller has reviewed the following figures and accepts them as reasonable.
|
Inventory |
$100,000 |
|
Land |
40,500 |
|
Building |
202,500 |
|
Equipment |
162,000 |
|
Bonds payable |
95,000 |
Required
1. Record the investment in Express Corporation.
2. Prepare a zone analysis and a determination and distribution of excess schedule.
3. Prepare the elimination entries that would be made on a consolidated worksheet prepared on the date of acquisition.