Parrot Inc.acquired an 85% interest in Sparrow Corporation on January 2,2011 for $42,500 cash when Sparrow had Capital Stock of $15,000 and Retained Earnings of $25,000.Sparrow's assets and liabilities had book values equal to their fair values except for inventory that was undervalued by $2,000.Balance sheets for Parrot and Sparrow on January 2,2011,immediately after the business combination,are presented in the first two columns of the consolidated balance sheet working papers.
Required:
Complete the consolidation balance sheet working papers for Parrot and subsidiary at January 1,2011.
Definitions:
Photosynthesis
The process by which green plants, algae, and certain bacteria transform light energy into chemical energy, using carbon dioxide and water to produce glucose and release oxygen.
Chloroplasts
Chloroplasts are organelles found in plant and algal cells that conduct photosynthesis, converting light energy into chemical energy stored in sugar molecules.
Solar Energy
Energy from the Sun that is converted into thermal or electrical energy, a renewable and sustainable source of power.
Mitochondria
Organelles found in the cytoplasm of eukaryotic cells that generate most of the cell's supply of adenosine triphosphate (ATP), used as a source of chemical energy.
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