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Consolidated Balance Sheet with Reciprocal Ownership Talbott Company purchased 80 percent of Short Company’s stock on January 1 20X8 at underlying book value At that date the fair value of the

Consolidated Balance Sheet with Reciprocal Ownership Talbott Company purchased 80 percent of Short Company’s stock on January 1 20X8 at underlying book value At that date the fair value of the

Consolidated Balance Sheet with Reciprocal Ownership

Talbott Company purchased 80 percent of Short Company’s stock on January 1, 20X8, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 20 percent of Short’s book value. On December 31, 20X9, Short purchased 10 percent of Talbott’s stock. Balance sheets for the two companies on December 31, 20X9, are as follows:

TALBOTT COMPANY

Condensed Balance Sheet

December 31, 20X9

Cash

$ 78,000

Accounts Payable

$ 90,000

Accounts Receivable

120,000

Bonds Payable

400,000

Inventory

150,000

Common Stock

300,000

Buildings & Equipment (net)

400,000

Retained Earnings

310,000

Investment in Short Company Common Stock

352,000

 

 

Total Assets

$1,100,000

Total Liabilities & Equities

$1,100,000

 

SHORT COMPANY

Condensed Balance Sheet

December 31, 20X9

Cash

$ 39,000

Accounts Payable

$ 60,000

Accounts Receivable

80,000

Bonds Payable

100,000

Inventory

120,000

Common Stock

200,000

Buildings & Equipment (net)

300,000

Retained Earnings

240,000

Investment in Talbott Company Common Stock

61,000

 

 

Total Assets

$600,000

Total Liabilities & Equities

$600,000

Required

Assuming that the treasury stock method is used in reporting Talbott’s shares held by Short, prepare a consolidated balance sheet worksheet and consolidated balance sheet for December 31, 20X9.

Tripti 09-Jul-2020

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