On December 31,20X8,Defoe Corporation Acquired 80 Percent of Crusoe Company's

Essay

On December 31,20X8,Defoe Corporation acquired 80 percent of Crusoe Company's common stock for $104,000 cash.The fair value of the noncontrolling interest at that date was determined to be $26,000.Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:
On that date,the book values of Crusoe's assets and liabilities approximated fair value except for inventory,which had a fair value of $45,000,and buildings and equipment,which had a fair value of $100,000.At December 31,20X8,Defoe reported accounts payable of $15,000 to Crusoe,which reported an equal amount in its accounts receivable.
Required:
1)Provide the consolidating entries needed to prepare a consolidated balance sheet immediately following the business combination.
2)Prepare a consolidated balance sheet worksheet.

Problem 55 (continued):