On January 2, 2014, Prunce Company acquired 90% of the outstanding common stock of Sun Company for $180,700 cash. Just before the acquisition, the balance sheets of the two companies were as follows: Prunce Sun Cash $282,130 $ 59,040 Accounts receivable (net) 142,020 24,810 Inventory 118,670 53,230 Plant and equipment (net) 395,640 92,960 Land 62,550 29,220 Total asset $1,001,010 $259,260 Accounts payable $106,440 $ 50,420 Mortgage payable 67,320 37,660 Common stock, $2 par value 421,400 76,960 Other contributed capital 217,440 21,970 Retained earnings 188,410 72,250 Total equities $1,001,010 $259,260 The fair values of Sun Company’s assets and liabilities are equal to their book values with the exception of land. (a) Your answer is correct. Prepare a journal entry to record the purchase of Sun Company’s common stock. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (b) Prepare a consolidated balance sheet at the date of acquisition. (Round answers to 0 decimal places, e.g. 125. List assets in order of liquidity.) PRUNCE COMPANY AND SUBSIDIARY Consolidated Balance Sheet January 2, 2014For the Year Ended January 2, 2014For the Quarter Ended January 2, 2014 Assets $ Current Assets Current Liabilities Expenses Intangible Assets Liabilities Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Revenues Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders' Equity $ Liabilities and Stockholders' Equity Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLiabilitiesLong-term InvestmentsLong-term LiabilitiesNet Income / (Loss)Property, Plant and EquipmentRevenuesStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders' Equity $ Current Assets Current Liabilities Expenses Intangible Assets Liabilities Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Revenues Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders' Equity Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLiabilitiesLong-term InvestmentsLong-term LiabilitiesNet Income / (Loss)Property, Plant and EquipmentRevenuesStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders' Equity Current Assets Current Liabilities Expenses Intangible Assets Liabilities Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Revenues Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders' Equity Current Assets Current Liabilities Expenses Intangible Assets Liabilities Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Revenues Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders' Equity

On January 2, 2014, Prunce Company acquired 90% of the outstanding common stock of Sun Company for $180,700 cash. Just before the acquisition, the balance sheets of the two companies were as follows: Prunce Sun Cash $282,130 $ 59,040 Accounts receivable (net) 142,020 24,810 Inventory 118,670 53,230 Plant and equipment (net) 395,640 92,960 Land 62,550 29,220 Total asset $1,001,010 $259,260 Accounts payable $106,440 $ 50,420 Mortgage payable 67,320 37,660 Common stock, $2 par value 421,400 76,960 Other contributed capital 217,440 21,970 Retained earnings 188,410 72,250 Total equities $1,001,010 $259,260 The fair values of Sun Company’s assets and liabilities are equal to their book values with the exception of land. (a) Your answer is correct. Prepare a journal entry to record the purchase of Sun Company’s common stock. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (b) Prepare a consolidated balance sheet at the date of acquisition. (Round answers to 0 decimal places, e.g. 125. List assets in order of liquidity.) PRUNCE COMPANY AND SUBSIDIARY Consolidated Balance Sheet January 2, 2014For the Year Ended January 2, 2014For the Quarter Ended January 2, 2014 Assets $ Current Assets Current Liabilities Expenses Intangible Assets Liabilities Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Revenues Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders' Equity $ Liabilities and Stockholders' Equity Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLiabilitiesLong-term InvestmentsLong-term LiabilitiesNet Income / (Loss)Property, Plant and EquipmentRevenuesStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders' Equity $ Current Assets Current Liabilities Expenses Intangible Assets Liabilities Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Revenues Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders' Equity Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLiabilitiesLong-term InvestmentsLong-term LiabilitiesNet Income / (Loss)Property, Plant and EquipmentRevenuesStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders' Equity Current Assets Current Liabilities Expenses Intangible Assets Liabilities Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Revenues Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders' Equity Current Assets Current Liabilities Expenses Intangible Assets Liabilities Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Revenues Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders' Equity

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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(a)


	Your answer is correct.

Prepare a journal entry to record the purchase of Sun Company’s common stock. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

(b)

Prepare a consolidated balance sheet at the date of acquisition. (Round answers to 0 decimal places, e.g. 125. List assets in order of liquidity.)

PRUNCE COMPANY AND SUBSIDIARY Consolidated Balance Sheet January 2, 2014For the Year Ended January 2, 2014For the Quarter Ended January 2, 2014
Assets
			$




Current Assets Current Liabilities Expenses Intangible Assets Liabilities Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Revenues Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders' Equity			$
Liabilities and Stockholders' Equity
Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLiabilitiesLong-term InvestmentsLong-term LiabilitiesNet Income / (Loss)Property, Plant and EquipmentRevenuesStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders' Equity
			$

Current Assets Current Liabilities Expenses Intangible Assets Liabilities Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Revenues Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders' Equity
Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLiabilitiesLong-term InvestmentsLong-term LiabilitiesNet Income / (Loss)Property, Plant and EquipmentRevenuesStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders' Equity




Current Assets Current Liabilities Expenses Intangible Assets Liabilities Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Revenues Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders' Equity
Current Assets Current Liabilities Expenses Intangible Assets Liabilities Long-term Investments Long-term Liabilities Net Income / (Loss) Property, Plant and Equipment Revenues Stockholders' Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders' Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders' Equity			$

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