Prepare stockholders’ equity section of consolidated balance sheet one year after acquisition


Question Description:

25

Prepare stockholders’ equity section of consolidated balance sheet one year after acquisition Pas and Sal Corporations’ balance sheets at December 31, 2010, are summarized as follows (in thousands): Pas Sal Cash $510 $120 Other assets 400 350 Total assets $910 $470 Liabilities $140 $ 70 Capital stock, par $10 600 350 Additional paid-in capital 100 30 Retained earnings 70 20 Total equities $910 $470 Pas acquired 80 percent of the voting stock of Sal on January 2, 2011, at a cost of $320,000. The fair values of Sal’s net assets were equal to book values on January 2, 2011. During 2011, Pas reported earnings of $110,000, including income from Sal of $32,000, and paid dividends of $50,000. Sal’s earnings for 2011 were $40,000 and its dividends were $30,000. REQUIRED : Prepare the stockholders’ equity section of the December 31, 2011, consolidated balance sheet for Pas Corporation and Subsidiary.

Answer

25