100% purchase, goodwill, several adjustments, worksheet. Use the preceding information for Purnell’s purchase of Soma common stock. Assume Purnell exchanged 24,000 shares of its own stock for 100% of the common stock of Soma. The stock had a market value of $50 per share and a par value of $1. Purnell had the following trial balance immediately after the purchase:
|
Purnell Company |
|
|
Cash |
170,000 |
|
Accounts Receivable |
300,000 |
|
Inventory |
410,000 |
|
Land |
800,000 |
|
Investment in Soma |
1,200,000 |
|
Buildings |
2,800,000 |
|
Accumulated Depreciation |
500,000 |
|
Equipment |
600,000 |
|
Accumulated Depreciation |
230,000 |
|
Current Liabilities |
150,000 |
|
Bonds Payable |
300,000 |
|
Common Stock ($1 par) |
100,000 |
|
Paid In Capital in Excess of Par |
3,900,000 |
|
Retained Earnings |
1,100,000 |
|
Total |
0 |
Required
1. Prepare a zone analysis and a determination and distribution of excess schedule for the investment in Soma.
2. Complete a consolidated worksheet for Purnell Company and its subsidiary Soma Company as of December 31, 20X1.