On January 1, 20X3, Guild Corporation reported total assets of $473,000, liabili
ID: 2458497 • Letter: O
Question
On January 1, 20X3, Guild Corporation reported total assets of $473,000, liabilities of $275,000, and stockholders’ equity of $198,000. At that date, Bristol Corporation reported total assets of $183,000, liabilities of $139,000, and stockholders’ equity of $44,000. Following lengthy negotiations, Guild paid Bristol’s existing shareholders $35,200 in cash for 80 percent of the voting common shares of Bristol.
Required:
What amount of total assets did Guild report in its individual balance sheet?
What amount of total assets was reported in the consolidated balance sheet?
What amount of total liabilities was reported in the consolidated balance sheet?
What amount of stockholders’ equity was reported in the consolidated balance sheet?
Immediately after Guild purchased the Bristol sharesExplanation / Answer
1 Total assets did Guild report in its individual balance sheet Amount Total Assets Before acquisition 4,73,000.00 Less Cash paid for acquisition -35,200.00 Add cost of investment 35,200.00 Total Assets reported 4,73,000.00 2 Total assets was reported in the consolidated balance sheet Amount Total Assets Before acquisition 4,73,000.00 Add: Bristol's Assets 1,83,000.00 Less Cost of investment -35,200.00 Total Assets reported 6,20,800.00 3 Amount of total liabilities was reported in the consolidated balance sheet Amount Total Liabilities before acquisition 2,75,000.00 Add Bristol Liabilities 1,39,000.00 Add Minority Interest 8,800.00 Liabilities 4,22,800.00 4 Stockholders’ equity was reported in the consolidated balance sheet Amount Stock Holders equity 1,98,000.00