Porter Corporation acquired 70 percent of Darla Corporation's common stock on December 31, 20X4, for $102,200. At that date, the fair value of the non-controlling interest was $43,800. Data from the balance sheets of the two companies included the following amount as of the date of acquisition:
Item Corporation Corporation
Cash $ 50,300 $ 21,000
Accounts Receivable 90,000 44,000
Inventory 130,000 75,000
Land 60,000 30,000
Buildings and Equipment 410,000 250,000
Less: Accumulated Depreciation (150,000) (80,000)
Investment in Darla Corporation Stock 102,200 -
Total Assets $692,500 $340,000
Accounts Payable $152,500 $ 35,000
Mortgage Payable 250,000 180,000
Common Stock 80,000 40,000
Retained Earnings 210,000 85,000
Total Liabilities and
Stockholders' Equity $692,500 $340,000
At the date of business combination, the book values of Darla's assets and liabilities approximated fair value except for inventory, which had a fair value of $81,000, and buildings and equipment, which had a fair value of $185,000. At December 31, 20X4, Porter reported accounts payable of $12,500 to Darla, which reported an equal amount in its accounts receivable.
a. Give the eliminating entry or entries needed to prepare a consolidated balance sheet immediately following the business combination.
b. Prepare a consolidated balance sheet workpaper.
c. Prepare a consolidated balance sheet in good form.
The expert prepares entries and present consolidated statements.