Pawl Corporation Acquired 90% of Snab Corporation on January 1

question 3

Essay

Pawl Corporation acquired 90% of Snab Corporation on January 1, 2011 for $72,000 cash when Snab's stockholders' equity consisted of $30,000 of Capital Stock and $30,000 of Retained Earnings.The difference between the fair value of Pawl's assets and liabilities and the book value was allocated to a plant asset with a remaining 10-year straight-line life that was overvalued on the books by $5,000.The remainder was attributable to goodwill.The separate company statements for Pawl and Snab appear in the first two columns of the partially completed consolidation working papers.
Required:
Complete the consolidation working papers for Pawl and Snab for the year 2011.

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Definitions:

Inventory Items

Goods and materials that a business holds for the ultimate goal of resale or production.

List Price

The suggested retail price of a product or service, before any discounts or adjustments.

Delivery Truck

A vehicle specifically designed and used for transporting goods from one location to another.

Undepreciated Cost

The original cost of an asset minus any accumulated depreciation.