Dish Corp. acquired 100% of the stock of Towel Company by issuing 10,000 shares of $10 par common stock with a market value of $60 per share. Summarized balance sheet data for the two companies immediately prior to the acquisition are as follows:
Determine the dollar amounts to be presented in the consolidated balance sheet for (1) total assets, (2) total liabilities, and, (3) total equity.
First we calculate the amount of goodwill.
The net assets of Towel Company are FV of Total Assets - FV of total liabilities
Net Assets = 1,300,000-750,000=550,000
The amount paid is ...
The solution explains how to prepare a consolidated balance sheet