Pommu Corporation Paid $78,000 for a 60% Interest in Schtick

question 30

Essay

Pommu Corporation paid $78,000 for a 60% interest in Schtick Inc.on January 1, 2011, when Schtick's Capital Stock was $80,000 and its Retained Earnings $20,000.The fair values of Schtick'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, Pommu made only two journal entries with respect to its investment in Schtick.On January 1, 2011, it debited the Investment in Schtick account for $78,000 and on November 1, 2011, it credited Dividend Income for $6,000.
Required:
1.Prepare a consolidated income statement and a statement of retained earnings for Pommu and Subsidiary for the year ended December 31, 2011.
2.Prepare a consolidated balance sheet for Pommu and Subsidiary as of December 31, 2011.

Identify the sequence and interrelation among various types of budgets in the budgeting process.

Calculate the total direct materials purchases needed based on production requirements.

Determine the cost of direct materials used in production given the quantity and price of each material.

Calculate total selling expenses based on various components such as commissions, salaries, advertising expenses, and shipping expenses.

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Definitions:

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A perspective in psychology that emphasizes the study of the whole person and the uniqueness of each individual's experience.

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The complex psychophysiological experience of an individual's state of mind as interacting with biochemical (internal) and environmental (external) influences.