Allocation schedule for cost book value
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Palor Corp acquired 70% of the outstanding common stock of Setting Corp on
Janunary 1, 2006 for $178,000 cash. Immediately after this acuquisition the
balance sheet information for the two companies was as follows
Palor Bv Book Value Fair Value
Cash 32,000 20,000 20,000
Receivables-net 80,000 30,000 30,000
Inventories 70,000 30,000 50,000
Land 100,000 50,000 60,000
Buildings-net 110,000 70,000 90,000
Equipment-net 80,000 40,000 30,000
Investment in setting 178,000 ______ ______
Total assets 650,000 240,000 280,000
Accounts payable 90,000 80,000 80,000
other liabilities 10,000 50,000 40,000
Capital stock $10 par 500,000 100,000
Retained earnings 50,000 10,000
Total equities 650,000 240,000
Prepare a schedule to allocate the difference between the cost of the investment in setting
and the book value of the interest to identifiable and unidentifiable net assets.
Prepare a consolidated balance sheet for Palor Corp and Subsidiary at January 1, 2006
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Solution Summary
The allocation schedule for cost book values are examined. A consolidated balance sheet for Palor Corp is prepared.
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