Allocation schedule for fair value/book value differential and consolidated balance sheet at acquisition
Par Corporation acquired 70 percent of the outstanding common stock of Set Corporation on January 1, 2011, for $350,000 cash. Immediately after this acquisition the balance sheet information for the two companies was as follows (in thousands):
|
Set |
|||
|
Par Book Value |
Book Value |
Fair Value |
|
|
Assets |
|||
|
Cash |
$ 70 |
$ 40 |
$ 40 |
|
Receivables—net |
160 |
60 |
60 |
|
Inventories |
140 |
60 |
100 |
|
Land |
200 |
100 |
120 |
|
Buildings—net |
220 |
140 |
180 |
|
Equipment—net |
160 |
80 |
60 |
|
Investment in Set |
350 |
— |
— |
|
Total assets |
$1,300 |
$480 |
$560 |
|
Liabilities and Stockholders’ Equity |
|||
|
Accounts payable |
$ 180 |
$160 |
$160 |
|
Other liabilities |
20 |
100 |
80 |
|
Capital stock, $20 par |
1,000 |
200 |
|
|
Retained earnings |
100 |
20 |
|
|
Total equities |
$1,300 |
$480 |
|
REQUIRED
1. Prepare a schedule to allocate the difference between the fair value of the investment in Set and the book value of the interest to identifiable and unidentifiable net assets.
2. Prepare a consolidated balance sheet for Par Corporation and Subsidiary at January 1, 2011.