Answered You can hire a professional tutor to get the answer.

QUESTION

Peat Company acquired a 100% interest in Moss by issuing 50,000 shares of its $1 par value common stock valued at $776,000.

Peat Company acquired a 100% interest in Moss by issuing 50,000 shares of its $1 par value common stock valued at $776,000. Prior to the transaction, both entities were under common control; accordingly, the transaction is accounted for as a pooling of interests under US GAAP. 

The parent and the subsidiary report the following balance sheets on the acquisition date, prior to the issuance of stock by Peat:

Peat:

Cash 920753

A/R 725760

Inventory 1099980

PPE, net 5291244

Current Liabilities 814779

LT Liabilities3379200

Common Stock927045

APIC688905

Retained Earnings2227808

Moss:

Cash107576

A/R165648

Inventory212772

PPE, net5291244

Current Liabilities165648

LT Liabilities238000

Common Stock47600

APIC59500

Retained Earnings368900

Provide the journal entry by Peat to record the investment and the consolidating entries.

Show more
LEARN MORE EFFECTIVELY AND GET BETTER GRADES!
Ask a Question