a) Prepare the worksheet for preparing a consolidated statement of financial position on the date of acquisition. You may add accounts to the worksheet that may be necessary.b) Prepare a consolidated statement of financial position for Parker Company and subsidiary on January 2, 2020. On January 2, 2020, Parker Company purchased 100% of the outstanding ordinary shares ofPocket Company for $1,470,000. After the purchase, the statements of financial position of thetwo companies appeared as follows:ParkerPocketCompanyCompanyAssetsLand$280,000$595,000$105,000$175,000$525,000$280,000$1,470,000$35,000$70,000$2,555,000 $1,120,000Buildings (net)EquipmentInvestment in Pocket 's ordinary sharesAccounts Receivable$70,000$70,000Current assetsTotalsLiabilities and EquityShare capital-ParkerShare capital PocketRetained earnings-ParkerRetained earnings-PocketNotes PayableAccounts Payable$1,295,000$700,000$840,000$210,000$105,000$105,000$2,555,000 $1,120,000$210,000$210,000TotalsAn analysis showed that the fair value of the assets of Pocket Company on January 2, 2020 asfollows:AssetsLandFair value$420,000Buildings (net)EquipmentAccounts Receivable$735,000$280,000$70,000$70,000Cash

Consolidated financial statements are the financial statements of an entity that has subsidiaries.…

Answered: On January 2, 2020, Parker Company…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

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a) Prepare the worksheet for preparing a consolidated statement of financial position on the date of acquisition. You may add accounts to the worksheet that may be necessary.

b) Prepare a consolidated statement of financial position for Parker Company and subsidiary on January 2, 2020.

On January 2, 2020, Parker Company purchased 100% of the outstanding ordinary shares of
Pocket Company for $1,470,000. After the purchase, the statements of financial position of the
two companies appeared as follows:
Parker
Pocket
Company
Company
Assets
Land
$280,000
$595,000
$105,000
$175,000
$525,000
$280,000
$1,470,000
$35,000
$70,000
$2,555,000 $1,120,000
Buildings (net)
Equipment
Investment in Pocket 's ordinary shares
Accounts Receivable
$70,000
$70,000
Current assets
Totals
Liabilities and Equity
Share capital-Parker
Share capital Pocket
Retained earnings-Parker
Retained earnings-Pocket
Notes Payable
Accounts Payable
$1,295,000
$700,000
$840,000
$210,000
$105,000
$105,000
$2,555,000 $1,120,000
$210,000
$210,000
Totals
An analysis showed that the fair value of the assets of Pocket Company on January 2, 2020 as
follows:
Assets
Land
Fair value
$420,000
Buildings (net)
Equipment
Accounts Receivable
$735,000
$280,000
$70,000
$70,000
Cash

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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