Acc 440 Week 4 Learning Team Ch. 3 And 4 Assignment E3-8, C4-1

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ACC 440 Week 4 Learning Team Ch. 3 and 4 Assignment E3-8, C4-1

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<div><b>E3-8</b><b>Subsidiary Acquired for Cash</b>Fineline Pencil Company acquired 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:<b>Fineline Pencil</b><b>Company</b><b>Smudge Eraser</b><b>Corporation</b><b>Book Value Fair Value Book Value Fair Value</b>Cash $200,000 $200,000 $ 50,000 $ 50,000Other Assets 400,000 650,000 120,000 180,000Total Debits $600,000 $170,000Current Liabilities $100,000 100,000 $ 80,000 80,000Common Stock 300,000 50,000Retained Earnings 200,000 40,000Total Credits $600,000 $170,000<b><i>Required</i></b>Prepare a consolidated balance sheet immediately following the acquisition.<b>C4-1</b><b>Need for Consolidation Process</b>At a recent staff meeting, the vice president of marketing appeared confused. The controller had assured him that the parent company and each of the subsidiary companies had properly accounted for all transactions during the year. After several other questions, he finally asked, “If it has been done properly, then why must you spend so much time and make so many changes to the amounts reported by the individual companies when you prepare the consolidated financial statements each month? You should be able to just add the reported balances together.”<b><i>Required</i></b>Prepare an appropriate response to help the controller answer the marketing vice president’s question</div>
http://www.examtutorials.com/course/acc-440-week-4-learning-team-ch-3-and-4-assignment-e3-8-c4-1/Download answer at https://www.examtutorials.com/course/acc-440-week-4-learning-team-ch-3-and-4-assignment-e3-8-c4-1/
<div><b>E3-8</b><b>Subsidiary Acquired for Cash</b>Fineline Pencil Company acquired 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:<b>Fineline Pencil</b><b>Company</b><b>Smudge Eraser</b><b>Corporation</b><b>Book Value Fair Value Book Value Fair Value</b>Cash $200,000 $200,000 $ 50,000 $ 50,000Other Assets 400,000 650,000 120,000 180,000Total Debits $600,000 $170,000Current Liabilities $100,000 100,000 $ 80,000 80,000Common Stock 300,000 50,000Retained Earnings 200,000 40,000Total Credits $600,000 $170,000<b><i>Required</i></b>Prepare a consolidated balance sheet immediately following the acquisition.<b>C4-1</b><b>Need for Consolidation Process</b>At a recent staff meeting, the vice president of marketing appeared confused. The controller had assured him that the parent company and each of the subsidiary companies had properly accounted for all transactions during the year. After several other questions, he finally asked, “If it has been done properly, then why must you spend so much time and make so many changes to the amounts reported by the individual companies when you prepare the consolidated financial statements each month? You should be able to just add the reported balances together.”<b><i>Required</i></b>Prepare an appropriate response to help the controller answer the marketing vice president’s question</div>
https://www.examtutorials.com/course/acc-440-week-4-learning-team-ch-3-and-4-assignment-e3-8-c4-1/

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