Question: 3. Mendol Corporation purchased 100% of the common


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24.99

Question: 3. Mendol Corporation purchased 100% of the common stock of Carbury Inc. on January 2, 2014. Carnac’s balance sheet on January 2, 2014 was as follows: Accounts receivable-net $180,000 Current liabilities $ 70,000 Inventory 360,000 Long term debt 160,000 Land 40,000 Common stock ($1 par) 20,000 Building-net 60,000 Paid-in capital 430,000 Equipment-net 80,000 Retained earnings 40,000 Total Assets $720,000 Total Liabilities & Equity $720,000 Fair values agree with book values except for inventory, land, and equipment that have fair values of $400,000, $50,000 and $70,000, respectively. Carbury has unrecorded patent rights valued at $20,000. Required: a. Prepare a schedule to allocate the purchase price to Carbury’s assets and liabilities assuming Mendol paid $560,000 cash for the acquisition. b. Prepare the consolidation worksheet with entries for a January 2, 2014 consolidated balance sheet.

Answer

24.99