On December 31, 2016, Parent Company Purchased 80% of the Common

Essay

On December 31, 2016, Parent Company purchased 80% of the common stock of Subsidiary Company for $280,000.On this date, Subsidiary had total owners' equity of $250,000 (common stock $20,000; other paid-in capital, $80,000; and retained earnings, $150,000).Any excess of cost over book value is due to the under or overvaluation of certain assets and liabilities.Inventory is undervalued $5,000.Land is undervalued $20,000.Buildings and equipment have a fair value which exceeds book value by $30,000.Bonds payable are overvalued $5,000.The remaining excess, if any, is due to goodwill.
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Required:
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a.Prepare a value analysis schedule for this business combination.?
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b.Prepare the determination and distribution schedule for this business combination
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c.Prepare the necessary elimination entries in general journal form.