Comparative balance sheets under traditional and entity theories
Balance sheets for Pad Corporation and its 80 percent owned subsidiary, Sit Company, at December 31, 2012, are summarized as follows (in thousands):
|
Pad |
Sit |
|
|
Assets |
||
|
Cash |
$ 50 |
$ 20 |
|
Receivables—net |
75 |
35 |
|
Inventories |
110 |
30 |
|
Plant assets—net |
215 |
85 |
|
Investment in Sit |
144 |
— |
|
Total assets |
$594 |
$170 |
|
Liabilities and Stockholders’ Equity |
||
|
Accounts payable |
$ 80 |
$ 15 |
|
Other liabilities |
20 |
5 |
|
Total liabilities |
100 |
20 |
|
Capital stock |
300 |
100 |
|
Retained earnings |
194 |
50 |
|
Stockholders’ equity |
494 |
150 |
|
Total equities |
$594 |
170 |
ADDITIONAL INFORMATION
1. Pad Corporation paid $128,000 for its 80% interest in Sit on January 1, 2011, when Sit had capital stock of $100,000 and retained earnings of $10,000.
2. At December 31, 2012, Pad’s inventory included items on which Sit had recorded gross profit of $20,000.
REQUIRED : Prepare comparative consolidated balance sheets for Pad Corporation and Subsidiary at December 31, 2012, under the traditional and entity theories of consolidation.