Determining Balance Sheet Prior to Consolidation
On January 1, 2011, Pat Company purchased 90% of the outstanding common stock of Solo Company for $236,000 cash. The balance sheet for Pat Company just before the acquisition of Solo Company stock, along with the consolidated balance sheet prepared at the date of acquisition, follows.
|
Pat Company |
Consolidated |
|
|
Cash |
$ 540,000 |
$ 352,000 |
|
Accounts receivable |
272,000 |
346,000 |
|
Advances to Solo Company |
10,000 |
|
|
Inventory |
376,000 |
451,000 |
|
Plant and equipment |
622,000 |
820,000 |
|
Land |
350,000 |
421,000 |
|
Total |
$2,170,000 |
$2,390,000 |
|
Accounts payable |
$ 280,000 |
$ 386,000 |
|
Long term liabilities |
520,000 |
605,500 |
|
Noncontrolling interest in subsidiary |
28,500 |
|
|
Common stock |
890,000 |
890,000 |
|
Other contributed capital |
300,000 |
300,000 |
|
Retained earnings |
180,000 |
180,000 |
|
Total |
$2,170,000 |
$2,390,000 |
One week before the acquisition, Pat Company had advanced $10,000 to Solo Company. Solo Company had not yet recorded the transaction on the date of acquisition. In addition, on the date of acquisition, Solo Company owed Pat Company $4,000 for purchases of merchandise on account. The merchandise had been sold to outside parties prior to the date of acquisition.
Required:
- Determine the amount of cash that appeared on Solo Company”s balance sheet immediately prior to the acquisition of its stock by Pat Company.
- Determine the amount of total stockholders” equity on Solo Company”s separate balance sheet at the date of acquisition.
- Determine the amount of total assets appearing on Solo Company”s separate balance sheet on the date of acquisition.