Consolidated balance sheet work papers (fair value/book value differentials and noncontrolling interest)
Pop Corporation acquired a 70 percent interest in Stu Corporation on January 1, 2011, for $1,400,000, when Stu’s stockholders’ equity consisted of $1,000,000 capital stock and $600,000 retained earnings. On this date, the book value of Stu’s assets and liabilities was equal to the fair value, except for inventories that were undervalued by $40,000 and sold in 2011, and plant ssets that were undervalued by $160,000 and had a remaining useful life of eight years from January 1. Stu’s net income and dividends for 2011 were $140,000 and $20,000, respectively.
Separate company balance sheet information for Pop and Stu Corporations at December 31, 2011, follows (in thousands):
|
Pop |
Stu |
|
|
Cash |
$ 120 |
$ 40 |
|
Accounts receivable—customers |
880 |
400 |
|
Accounts receivable from Pop |
— |
20 |
|
Dividends receivable |
14 |
— |
|
Inventories |
1,000 |
640 |
|
Land |
200 |
300 |
|
Plant assets—net |
1,400 |
700 |
|
Investment in Stu |
1,442 |
— |
|
$5,056 |
$2,100 |
|
|
Accounts payable—suppliers |
$ 600 |
$ 160 |
|
Accounts payable to Stu |
20 |
— |
|
Dividends payable |
80 |
20 |
|
Long term debt |
1,200 |
200 |
|
Capital stock |
2,000 |
1,000 |
|
Retained earnings |
1,156 |
720 |
|
$5,056 |
$2,100 |
REQUIRED: Prepare consolidated balance sheet work papers for Pop Corporation and Subsidiary at December 31, 2011.