10 Company A acquired 100% of Company B on January 1 2018 at a premium to book value and wants to prepare a consolidated balance sheet for the combined entity as of December 31, 2018 The financial statements for each individual entity are for the period ending December 31, 2018. Balance Sheet Company A Company B Sales 400,000 250,000 Cost of Goods Sold (150,000) (100,000) Depreciation (30,000) (25,000) Net Income 220,000 125,000 Statement of Retained Earnings Beginning Balance 230,000 100,000 Net Income 220,000 125,000 Ending Balance 450,000 225,000 Balance Sheet Totals Cash 20,000 40,000 Accounts Receivable 30,000 25,000 Inventory 60,000 60,000 Investment in Company B 200,000 Land 250,000 300,000 Buildings and Equipment 700,000 220,000 Accumulated Depreciation (450,000) (120,000) Total Assets 1,110,000 545,000 Accounts Payable 60,000 50,000 Debt Outstanding 300,000 100,000 Common Stock 300,000 170,000 Retained Earnings 450,000 225,000 What will the invest in Company B and Dividends declared be for the consolidate company at the end of the year?
10 Company A acquired 100% of Company B on January 1 2018 at a premium to book value and wants to prepare a consolidated balance sheet for the combined entity as of December 31, 2018 The financial statements for each individual entity are for the period ending December 31, 2018.
Balance Sheet Company A Company B
Sales 400,000 250,000
Cost of Goods Sold (150,000) (100,000)
Net Income 220,000 125,000
Statement of
Beginning Balance 230,000 100,000
Net Income 220,000 125,000
Ending Balance 450,000 225,000
Balance Sheet Totals
Cash 20,000 40,000
Accounts Receivable 30,000 25,000
Inventory 60,000 60,000
Investment in Company B 200,000
Land 250,000 300,000
Buildings and Equipment 700,000 220,000
Accumulated Depreciation (450,000) (120,000)
Total Assets 1,110,000 545,000
Accounts Payable 60,000 50,000
Debt Outstanding 300,000 100,000
Common Stock 300,000 170,000
Retained Earnings 450,000 225,000
What will the invest in Company B and Dividends declared be for the consolidate company at the end of the year?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
