On January 1, 20X3, Guild Corporation reported total assets of $478,000, liabili
ID: 2501603 • Letter: O
Question
On January 1, 20X3, Guild Corporation reported total assets of $478,000, liabilities of $264,000, and stockholders’ equity of $214,000. At that date, Bristol Corporation reported total assets of $195,000, liabilities of $130,000, and stockholders’ equity of $65,000. Following lengthy negotiations, Guild paid Bristol’s existing shareholders $55,250 in cash for 85 percent of the voting common shares of Bristol.
A-what amount of total assets did Guild report in its individual balance sheet?
b-what amount of total assets was reported in the consolidated balance sheet?
c-what amount of total liabilties was reported in the consolidated balance sheet?
d- what amount of stockholders' equity was reported in the consolidated balance sheet?
Explanation / Answer
Answer no. A
Total Assets in Guild Individual Balance sheet = $478000
Answer no .b
Total Assets in Consolidated Balance sheet = Total Assts of Guild + Total Assets of Bristol - Amount of Investment made by Guild for 85% voting Common Share of Bristol
= $ 478000 + $ 195000 - $ 55250 = $ 617750
Answer no. c
Total Liabilities in Consolidated balance sheet = $264000 + $130000 = $394000
Answer no. d
Shareholder equity = $214000