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Worksheet To Consolidate A Balance Sheet with Goodwill

See attached file.

On September 1 20x8, A Company purchased 100 percent of the voting stock of B Company for $480,000 in cash. The separate condensed balance sheets immediately after the purchase were as follows:

A Company B Company
Other Assets $1,103,000 $544,500
Investment in B Company 480,000 0
Total assets $1,583,000 $544,500
Liabilities $435,500 $94,500
Common Stock 500,000 150,000
Retained Earnings 647,500 300,000
Total Liabilities
and stockholder's equity $1,583,000 $544,500

Prepare a worksheet for preparing the consolidated balance sheet immediately after A Company acquired control of B Company. Assume that any excess cost of A Company's investment in the subsidiary over book value is attributable to goodwill from consolidation.


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See attached file.

Because there have been no operations, only the initial value of the Investment in B ...

Solution Summary

Using an Excel 97-2003 spreadsheet, this solution illustrates how to consolidate the balances of an acquiring corporation and its newly-purchased subsidiary immediately after the acquisition if Goodwill is involved.