On January 1, 2005, The Sun Corporation issued 10,000 shares of its own $10 par value common stock for 9,000 shares of the outstanding stock of The Moon Corporation in an acquisition. The Sun common stock at January 1, 2005 was selling at $70 per share. Just before the business combination, balance sheet information of the two corporations was as follows: The Sun The Moon The Moon Book Value Book Value Fair Value Cash 25,000 55,000 12,000 12,000 36,000 Inventories 32,000 Other current assets 110,000 90,000 110,000 Land 100,000 30,000 90,000 Plant and equipment-net 660,000 250,000 375,000 950,000 414,000 623,000 Liabilities 220,000 50,000 50,000 Capital stock, $10 par value Additional paid-in capital 500,000 100,000 170,000 60,000 950,000 40,000 Retained earnings 224,000 414,000 Required: 1. Prepare the Journal Entry on The Sun Corporation's books to account for the business combination. 2. Prepare an Elimination Worksheet Entry. 3. Prepare a Consolidated Balance Sheet Working Papers for The Sun Corporation and Subsidiary immediately after the business combination.

On January 1, 2005, The Sun Corporation issued 10,000 shares of its own $10 par value common stock for 9,000 shares of the outstanding stock of The Moon Corporation in an acquisition. The Sun common stock at January 1, 2005 was selling at $70 per share. Just before the business combination, balance sheet information of the two corporations was as follows: The Sun The Moon The Moon Book Value Book Value Fair Value Cash 25,000 55,000 12,000 12,000 36,000 Inventories 32,000 Other current assets 110,000 90,000 110,000 Land 100,000 30,000 90,000 Plant and equipment-net 660,000 250,000 375,000 950,000 414,000 623,000 Liabilities 220,000 50,000 50,000 Capital stock, $10 par value Additional paid-in capital 500,000 100,000 170,000 60,000 950,000 40,000 Retained earnings 224,000 414,000 Required: 1. Prepare the Journal Entry on The Sun Corporation's books to account for the business combination. 2. Prepare an Elimination Worksheet Entry. 3. Prepare a Consolidated Balance Sheet Working Papers for The Sun Corporation and Subsidiary immediately after the business combination.

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter13: Earnings Per Share (eps)

Section: Chapter Questions

Problem 2R: Ponce Towers, Inc., had 50,000 shares of common stock and 10,000 shares of 100 par value, 8%...

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