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On January 1 2017 Prestige Corporation acquired 100 percent of the voting stock of Stylene Corporation in exchange for $2030000 in cash and securities. On the acquisition date

On January 1, 2017, Prestige Corporation acquired 100 percent of the voting stock of Stylene Corporation in exchange for $2,030,000 in cash and securities. On the acquisition date, Stylene had the following balance sheet: At the acquisition date, the book values of Stylene s assets and liabilities were generally equivalent to their fair values except for the following assets: During the next two years, Stylene has the following income and dividends in its own separately prepared financial reports to its parent. _____________ Net Income ___________ Dividends 2017 .............. $175,000 .................... $25,000 2018 ............... 375,000 ..................... 45,000 Dividends are declared and paid in the same period. The December 31, 2018, separate financial statements for each company appear below. Parentheses indicate credit balances. a. Prepare Prestige s acquisition-date fair-value allocation schedule for its investment in Stylene. b. Show how Prestige determined its December 31, 2018, Investment in Stylene balance. c. Prepare a worksheet to determine the balances for Prestige s December 31, 2018, consolidated financial statements?

Apr 22 2020 View more View Less

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