Question
Below are the pre-combination condensed balance sheets of Princecraft and Sylvan Companies just prior to Princecraft's...
Below are the pre-combination condensed balance sheets of Princecraft and Sylvan Companies just prior to Princecraft's acquisition of 90 percent of the voting shares of Sylvan for $43 million in chas. The book value of Sylvan Company's net assets approximate fair value. The noncontrolling interest in Sylvan has a fair value of $4,250,000.
| Princecraft Company | Sylvan Company | |
| Cash | $60,000,000 | $2,000,000 |
| Other current assts | $20,000,000 | $8,000,000 |
| Property and equipment, net | $70,000,000 | $15,000,000 |
| Total assets | $150,000,000 | $25,000,000 |
| Total liabilties | $30,000,000 | $8,000,000 |
| Common stock | $15,000,000 | $5,000,000 |
| Additional paid-in capital | $45,000,000 | $10,000,000 |
| Retained earnings | $60,000,000 | $2,000,000 |
| Total liabilities and equity | $150,000,000 | $25,000,000 |
Required:
a. Calculate total goodwill and its allocation to the controlling and noncontrolling interests.
b. Prepare the consolidation working paper at the date of acquisition.
c. Prepare the consolidated balance sheet at the date of acquisition, in good form.
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Answer #1
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