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    Consolidated balance sheet

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    E3-8 Subsidiary Acquired for Cash
    Fineline Pencil Company purchased 100 percent of Smudge Eraser Corporation's stock on January 2,20X3, for $150,000 cash. Summarized balance sheet data for the companies on December 31, 20X2, are
    as follows:

    Fineline Pencil Smudge Eraser
    Company Corporation
    Book Value Fair Value Book Value Fair Value
    Cash $200,000 $200,000 $ 50,000 $ 50,000
    Other Assets 400,000 650,000 120,000 180,000

    Total Debits $600,000 $170,000

    Current Liabilities $100,000 $100,000 $ 80,000 $ 80,000
    Common Stock 300,000 50,000
    Retained Earnings 200,000 40,000

    Total Credits $600,000 $170,000

    Required
    Prepare a consolidated balance sheet immediately following the acquisition.

    © BrainMass Inc. brainmass.com June 3, 2020, 8:55 pm ad1c9bdddf
    https://brainmass.com/business/financial-statements/consolidated-balance-sheet-157859

    Solution Summary

    The solution explains how to prepare a consolidated balance sheet immediately after the acquisition.

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