Savy Corporation's Stockholders' Equity on December 31,2014 Was as Follows

question 19

Essay

Savy Corporation's stockholders' equity on December 31,2014 was as follows:
8% cumulative preferred stock,$100 par value,
callable at $109,with two years of dividends
On January 1,2015,Paul Corporation purchased a 70% interest in Savy's common stock for $2,100,000.On this date the book values of Savy's assets and liabilities are equal to their fair values.
Required:
1.Determine the book value of the common stockholders' equity for Savy Corporation on January 1,2015.
2.What is the amount of goodwill reported on the consolidated balance sheet for Paul Corporation and Subsidiary at January 2,2015?
3.On January 2,2015,Paul purchased 70% of Savy's preferred stock for $50,000.Prepare the journal entry(ies)for Paul for this purchase on January 2,2015.
4.Prepare the elimination entry on the consolidating work papers for the Investment in Savy,Preferred Stock and Savy's Preferred Stock on January 2,2015.

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Definitions:

Predicted Outcome Value

A theory in interpersonal communication that suggests individuals engage in communication based on the anticipated value or outcome of the interaction.

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A process where interactions between individuals intensify over time, leading to a closer relationship.

Relationship Talk

Conversations specifically focused on discussing the status, issues, or dynamics of a relationship between individuals.