Platt Corporation Paid $87,500 for a 70% Interest in Suve

question 6

Essay

Platt Corporation paid $87,500 for a 70% interest in Suve Corporation on January 1, 2011, when Suve's Capital Stock was $70,000 and its Retained Earnings $30,000.The fair values of Suve's identifiable assets and liabilities were the same as the recorded book values on the acquisition date.Trial balances at the end of the year on December 31, 2011 are given below:
During 2011, Platt made only two journal entries with respect to its investment in Suve.On January 1, 2011, it debited the Investment in Suve account for $87,500 and on November 1, 2011, it credited Dividend Income for $7,000.
Required:
1.Prepare a consolidated income statement and a statement of retained earnings for Platt and Subsidiary for the year ended December 31, 2011.
2.Prepare a consolidated balance sheet for Platt and Subsidiary as of December 31, 2011.

---

Definitions:

Deep Sleep

A stage of sleep characterized by slow brain waves, known as delta waves, during which the body repairs and regrows tissues, builds bone and muscle, and strengthens the immune system.

Preoperational Stage

The second stage in Piaget’s scheme, characterized by inflexible and irreversible mental manipulation of symbols.

Cognitive Development

A theory and process that explains how human intelligence grows and changes over time, focusing on how children acquire, process, and utilize information.

Abstract Reasoning

The ability to analyze information, detect patterns and relationships, and solve problems on a complex, abstract level.