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Robinson Corporation purchased all the outstanding common stock of Hoffman Plastics, Inc. on December 31, 2011. Just before the purchase the condensed balance sheets of the two companies appeared as

Robinson Corporation purchased all the outstanding common stock of Hoffman Plastics, Inc. on December 31, 2011. Just before the purchase, the condensed balance sheets of thetwo companies appeared as follows.

 

Robinson Corporation

Hoffman Plastics, Inc.

Current assets

$1,480,000

$ 435,500

Plant and equipment (net)

2,100,000

676,000

 

$3,580,000

$1,111,500

Current liabilities

$ 578,000

$ 92,500

Common stock

1,950,000

525,000

Retained earnings

1,052,000

494,000

 

$3,580,000

$1,111,500

Robinson used current assets of $1,225,000 to acquire the stock of Hoffman Plastics. The excess of this purchase price over the book value of Hoffman Plastics’ net assets is determined to be attributable $86,000 to Hoffman Plastics’ plant and equipment and the remainder to goodwill.

Instructions

(a) Prepare the entry for Robinson’s acquisition of Hoffman Plastics, Inc. stock.

(b) Prepare a consolidated worksheet at December 31, 2011.

(c) Prepare a consolidated balance sheet at December 31, 2011.

Jun 18 2020 View more View Less

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