The Following Are Preliminary Financial Statements for Black Co

question 9

Essay

The following are preliminary financial statements for Black Co.and Blue Co.for the year ending December 31, 2018, prior to Black's acquisition of Blue Co.
On December 31, 2018 (subsequent to the preceding statements), Black exchanged 10,000 shares of its $10 par value common stock for all of the outstanding shares of Blue.Black's stock on that date has a fair value of $50 per share.Black was willing to issue 10,000 shares of stock because Blue's land was appraised at $204,000.Black also paid $14,000 to attorneys and accountants who assisted in creating this combination.
Required:
Assuming that these two companies retained their separate legal identities, prepare a consolidation worksheet as of December 31, 2018.

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Definitions:

Option Agreement

A contract granting a party the opportunity, but not the obligation, to buy or sell an asset at an agreed-upon price and date.

Fee Simple

The greatest possible interest in land, providing the owner with full ownership rights, including the right to sell or bequeath the property.

Offeror

The party in a contractual agreement who makes an offer to another party, inviting them to enter into a contract, typically specifying the terms of the agreement.

Offeree

The individual or entity to whom an offer is made in a contract situation.