P3-4

Given separate and consolidated balance sheets, reconstruct the schedule to assign the fair value/book value differenti

Non controlling interest of $260 (fair value) plus $1.040 (fair value of Pam's Investment) equals total fair value of $1
Therefore, Pam's interest is 80% ($1.040/$1.300) and controlling interest is 20% ($260/$1.300)

Total fair value $ 1,300

Book value of Sun $ (1,040)
Excess fair value over book value $ 260

Excess Allocated to
Fair value - Book value
Plants assets-net $ 840 $ 800 $ 40
Goodwill $ 220
Total $ 260
air value/book value differential

) equals total fair value of $1.300.

$1.300)
P3-5
Prepare a consolidated balance sheet one year after acquisition

Separate Balance Sheet Adjustment and Eliminations

(In thousands) Mignonne Petite D C
Assets
Cash $ 104 $ 70
Receivable-net $ 300 $ 250
Inventories $ 900 $ 850
Land $ 500 $ 300
Equipment-net $ 1,500 $ 1,200 $ 236
Investment in Petite $ 2,786 $ - $ 2,786
$ 6,090 $ 2,670
Equities
Account payable $ 500 $ 120
Common stock, $10 par $ 4,000 $ 2,000 $ 2,000
Retained earnings $ 1,590 $ 550 $ 550
$ 6,090 $ 2,670
Consolidated Balance Sheet :
Mignonne and Subsidiary

$ 174
$ 550
$ 1,750
$ 800
$ 2,936
$ -
$ 6,210

$ 620
$ 4,000
$ 1,590
$ 6,210