(Learning Objective 3: Consolidating a wholly owned subsidiary) Murdoch Corporation paid $179,000 to acquire all the common stock of Newswire, Inc., and Newswire owes Murdoch $55,000 on a note payable. Immediately after the purchase on June 30, 20X6, the 2 companies’ balance sheets were as follows:
|
Murdoch |
Newswire |
|
|
Assets |
||
|
Cash |
$ 48,000 |
$ 32,000 |
|
Accounts receivable, net |
264,000 |
43,000 |
|
Note receivable from Newswire |
55,000 |
— |
|
Inventory |
193,000 |
153,000 |
|
Investment in Newswire |
179,000 |
— |
|
Plant assets, net |
105,000 |
138,000 |
|
Total |
$844,000 |
$366,000 |
|
Liabilities and Stockholders’ Equity |
||
|
Accounts payable |
$ 76,000 |
$ 37,000 |
|
Notes payable |
118,000 |
123,000 |
|
Other liabilities |
174,000 |
27,000 |
|
Common stock |
82,000 |
90,000 |
|
Retained earnings |
394,000 |
89,000 |
|
Total |
$844,000 |
$366,000 |
Required
Prepare Murdoch’s consolidated balance sheet. (It is sufficient to complete a consolidation work sheet.)