a consolidated balance sheet worksheet and

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Zenith Corporation acquired 70 percent of Down Corporation’s common stock on December 31, 20X4, for $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:

Item

Zenith Corporation

Down Corporation

Cash

$ 50,300

$ 21,000

Accounts Receivable

90,000

44,000

Inventory

130,000

75,000

Land

60,000

30,000

Buildings & Equipment

410,000

250,000

Less: Accumulated Depreciation

(150,000)

(80,000)

Investment in Down Corporation Stock

102,200

Total Assets

$692,500

$340,000

Accounts Payable

$152,500

$ 35,000

Mortgage Payable

250,000

180,000

Common Stock

80,000

40,000

Retained Earnings

210,000

85,000

Total Liabilities & Stockholders’ Equity

$692,500

$340,000

At the date of the business combination, the book values of Down’s assets and liabilities approximated fair value except for inventory, which had a fair value of $81,000, and buildings and equipment, which had a fair value of $185,000. At December 31, 20X4, Zenith reported accounts payable of $12,500 to Down, which reported an equal amount in its accounts receivable.

Required:

  • Give the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination.
  • Prepare a consolidated balance sheet worksheet.
  • Prepare a consolidated balance sheet in good form.
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