Punt Corporation Acquired a Controlling Interest in Saye Company for Cash

Essay

Punt Corporation acquired a controlling interest in Saye Company for cash. The separate balance sheet of Punt and the consolidated balance sheet immediately after the business combination were as follows:
Plant assets of Saye Company were undervalued by $15,000 on the date of the business combination; the remainder of Punt's cost was assigned to goodwill. The retained earnings of Saye on the date of the business combination amounted to $37,000.
a. Prepare the separate balance sheet of Saye Company on the date of the business combination.
b. What percentage of the common stock of Saye was acquired by Punt?
c. Prepare the working paper elimination (in journal entry format) for Punt Corporation and subsidiary on the date of the business combination.