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Play Company acquired 70 percent of Screen Corporation's shares on December 31, 20X5, at underlying book value of $98,000. At that date, the fair value of the noncontrolling interest was equal to 30 percent of the book value of Screen Corporation. Screen's balance sheet on January 1, 20X8, contained the following balances: Cash $50,000 Accounts Payable Accounts Receivable 35,000 Bonds Payable Inventory 40,000 Common Stock Buildings and Equipment 300,000 Additional Paid-In Capital Less: Accumulated Depreciation (100,000) Retained Earnings Total Assets $ 40,000 100,000 50,000 75,000 60,000 $ 325,000 Total Liabilities and Equities $ 325,000 On January 1, 20X8, Screen acquired 5,000 of its own $2 par value common shares from Nonaffiliated Corporation for $6 per share. Based on the preceding information, in the consolidating entry needed in preparing a consolidated balance sheet immediately following the acquisition of shares, Investment in Screen stock will be credited for: O $135,625. O $185,000. O $155,000. O $165,625.

Play Company acquired 70 percent of Screen Corporation's shares on December 31, 20X5, at underlying book value of $98,000. At that date, the fair value of the noncontrolling interest was equal to 30 percent of the book value of Screen Corporation. Screen's balance sheet on January 1, 20X8, contained the following balances: Cash $50,000 Accounts Payable Accounts Receivable 35,000 Bonds Payable Inventory 40,000 Common Stock Buildings and Equipment 300,000 Additional Paid-In Capital Less: Accumulated Depreciation (100,000) Retained Earnings Total Assets $ 40,000 100,000 50,000 75,000 60,000 $ 325,000 Total Liabilities and Equities $ 325,000 On January 1, 20X8, Screen acquired 5,000 of its own $2 par value common shares from Nonaffiliated Corporation for $6 per share. Based on the preceding information, in the consolidating entry needed in preparing a consolidated balance sheet immediately following the acquisition of shares, Investment in Screen stock will be credited for: O $135,625. O $185,000. O $155,000. O $165,625.

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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Play Company acquired 70 percent of Screen Corporation's shares on December 31, 20X5, at underlying book value of $98,000. At that date, the fair value of the noncontrolling interest was equal to 30 percent of the book value of Screen Corporation. Screen's balance sheet on January 1, 20X8, contained the following balances: Cash Accounts Receivable Inventory Buildings and Equipment 300,000 Less: Accumulated Depreciation (100,000) Retained Earnings Total Assets $50,000 35,000 40,000 Accounts Payable Bonds Payable Common Stock Additional Paid-In Capital O $135,625. O $185,000. $ 325,000 Total Liabilities and Equities $ 325,000 On January 1, 20X8, Screen acquired 5,000 of its own $2 par value common shares from Nonaffiliated Corporation for $6 per share. $155,000. O $165,625. $ 40,000 100,000 50,000 75,000 60,000 Based on the preceding information, in the consolidating entry needed in preparing a consolidated balance sheet immediately following the acquisition of shares, Investment in Screen stock will be credited for:
Transcribed Image Text:Play Company acquired 70 percent of Screen Corporation's shares on December 31, 20X5, at underlying book value of $98,000. At that date, the fair value of the noncontrolling interest was equal to 30 percent of the book value of Screen Corporation. Screen's balance sheet on January 1, 20X8, contained the following balances: Cash Accounts Receivable Inventory Buildings and Equipment 300,000 Less: Accumulated Depreciation (100,000) Retained Earnings Total Assets $50,000 35,000 40,000 Accounts Payable Bonds Payable Common Stock Additional Paid-In Capital O $135,625. O $185,000. $ 325,000 Total Liabilities and Equities $ 325,000 On January 1, 20X8, Screen acquired 5,000 of its own $2 par value common shares from Nonaffiliated Corporation for $6 per share. $155,000. O $165,625. $ 40,000 100,000 50,000 75,000 60,000 Based on the preceding information, in the consolidating entry needed in preparing a consolidated balance sheet immediately following the acquisition of shares, Investment in Screen stock will be credited for:
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