Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $97,300. At that date, the fair value of the noncontrolling interest was $41,700. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition: Item Phone Corporation Smart Corporation Cash $ 58,300 $ 22,000 Accounts Receivable 109,000
Phone Corporation acquired 70 percent of Smart Corporation’s common stock on December 31, 20X4, for $97,300. At that date, the fair value of the noncontrolling interest was $41,700. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:
| Item | Phone Corporation | Smart Corporation |
|---|---|---|
| Cash | $ 58,300 | $ 22,000 |
| 109,000 | 49,000 | |
| Inventory | 144,000 | 79,000 |
| Land | 73,000 | 36,000 |
| Buildings & Equipment | 426,000 | 266,000 |
| Less: |
(166,000) | (75,000) |
| Investment in Smart Corporation | 97,300 | |
| Total Assets | $ 741,600 | $ 377,000 |
| Accounts Payable | $ 142,500 | $ 26,000 |
| Mortgage Payable | 331,100 | 233,000 |
| Common Stock | 68,000 | 39,000 |
| 200,000 | 79,000 | |
| Total Liabilities & |
$ 741,600 | $ 377,000 |
At the date of the business combination, the book values of Smart’s assets and liabilities approximated fair value except for inventory, which had a fair value of $85,000, and buildings and equipment, which had a fair value of $206,000. At December 31, 20X4, Phone reported accounts payable of $13,400 to Smart, which reported an equal amount in its accounts receivable.
Prepare a consolidated balance sheet in good form.
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